That Netflix does not pay the bills is a fact. One of the streaming giants is looking for new formulas to maximize the profitability of its users’ subscriptions. The focus seems to be on trying to limit or eliminate the possibility of sharing an account, because it means that many people benefit from the service from a single payment and potential subscribers are lost.
The streaming platform for hits such as Stranger Things, The Squid Game or La Casa de Papel has carried out several pilot tests in recent months to take the temperature of the possibility of making those households that share an account more expensive and charging more, but It has become clear that it has not received good feedback from the public.
Netflix and its enemy: shared accounts
In the presentation of Netflix’s latest financial results, despite the fact that its revenues, operating income and subscriptions in the third quarter slightly exceeded its forecasts, it was shown that the company, like its competitors in the streaming sector, is losing money . In Netflix’s case, it racked up combined losses of $10 billion, expecting an annual operating profit of $5 billion to $6 billion.
With these worrying figures, new financing models are being worked at full throttle so that the numbers are greener and less red. Currently, the platform has 223 million subscribers , with a year-on-year increase of 2.41 million compared to 2021. However, despite this increase, it is known in offices that many households share their Netflix account, so They could increase those figures much more by making one account unable to have as many viewers.
Charge more for each extra home, yes or no?
Last March 2022, Netflix launched a pilot test in Chile, Costa Rica and Peru to limit the possibilities of sharing a Netflix account between households and create additional accounts dependent on a main one at a lower cost (about 2.70 euros to change). The results were not good and the company decided to try other territories, adding Argentina, Guatemala, El Salvador, Honduras and the Dominican Republic.
After years of being relatively lax about password sharing, Netflix began testing ways to make shared accounts pay more after recording its biggest subscriber losses earlier this year. In addition, Netflix plans to launch cheaper ad-supported subscriptions next month.
Although it remains to be seen how the impact of being low-cost accounts in exchange for ads would be economically, Netflix said Tuesday in the presentation of its financial results that, regardless of this, it will implement plans worldwide to “monetize” the exchange of accounts at the beginning of next year , once the experiments in the Latin American countries that we mentioned before are finished, discontinuing the “Add a house” functions in favor of the transfer of profiles.
Netflix will officially make it easier to share your Netflix account with family or friends who don’t live with you by creating “sub accounts” or “additional members.” Each subaccount would get a login, profile, and personalized recommendations. The company also said this week that you’ll be able to transfer your profiles to new accounts , making it easier for people who share accounts to get their own.
“We have come up with an approach to monetize account swapping and will begin rolling it out more broadly beginning in early 2023. After listening to consumer feedback, we will offer the ability for borrowers to transfer their Netflix profile to their own account, and for users to more easily manage their devices and create sub-accounts (“additional member”), if they want to pay for family or friends,” Netflix wrote in a letter to shareholders .