Netflix has tightened its control over password sharing, a move that could yield billions in previously lost revenue, but the company acknowledges that this is a delicate process.
“We test a lot of things, but we’ll never roll out anything that feels like it should turn the screws,” co-CEO Reed Hastings said during the company’s earnings interview in the first quarter. “It should feel like it makes sense for consumers to understand.”
The tests, announced earlier this year, are aimed at ‘harmonizing with the way consumers think about them’, Hastings added.
Netflix missed its own subscriber growth forecast by a wide margin, reporting 208 million global subscribers at the end of the quarter. Wall Street analysts and investors have increasingly wondered how much the company can earn by requiring each viewer to be properly logged in to their own account. Citibank analyst Jason Bazinet recently estimated that the company loses $ 6 billion a year by not restricting practice.
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Greg Peters, chief operating officer and chief product officer of Netflix, said the company was “investigating” the investigation for a while, describing it as a way to continually improve the service. ‘
Netflix wants to end up with a set of subscriber packages and prices that offer value and accessibility in a wide range of socio-economic conditions around the world. “While we’re doing this, ‘he continued, the aim is to be sure’ we can make sure that the people who use a Netflix account – who have access to it – are the ones who are authorized to do so. . ”
Nidhi Gupta of Fidelity Management & Research, who moderated the earnings interview, asked Peters in which regions of the world the most unbridled password sharing is shared.
“We see different patterns of behavior,” Peters said, not wanting to be specific anymore. “How people orient themselves to the service is different countries.” He added that sharing their password is not bad for some customers and that it may in fact be a sign of loyalty and love. “It’s more than just how they think about how they think they work on the system,” he said, “it’s how they think about sharing the service with a family member or someone they love.”
The patterns of how the part unfolds are “all different on the planet, and it differs in countries,” Peters added.