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Netflix Loses A Million Subscribers In Spain After Greedy Password Sharing
Crackdown

  [21][failures.jpg]

  [22]Failures

from the from-innovative-disruptor-to-ordinary-bore dept

  Tue, May 2nd 2023 05:32am - [23]Karl Bode

  We’ve noted repeatedly how Netflix’s password sharing crackdown is a
  [24]stupid cash grab that alienates and annoys loyal customers,
  [25]duplicates existing efforts to restrict “freeloaders,” won’t
  [26]give the company the financial windfall it thinks, and just
  generally represents how the company has inevitably shifted from
  innovative disruptor to the kind of [27]tone deaf cable giants it used
  to criticize.

  The plan basically involves charging users an extra $2-$3 a month if
  it’s found that someone is using your account outside of your home. The
  problem: Netflix has already been imposing blanket price hikes, and it
  already limits the number of simultaneously streams per account,
  forcing users to subscribe to more expensive tiers if they want to
  expand the limit.

  While the crackdown isn’t expected to hit U.S. subscribers until the
  end of the second quarter (aka soon), the effort has generally been a
  hot mess in the smaller countries Netflix first used as guinea pigs to
  test both the underlying tech and company messaging.

  The company had to suspend the efforts in countries like Argentina, El
  Salvador, Guatemala, Honduras, and the Dominican Republic, after users
  [28]were equal parts befuddled and annoyed. And in Spain, estimates are
  that the company [29]saw a defection of more than one million
  subscribers largely due to the higher, unnecessary fees:

    “There are of course inherent risks with clamping down on password
    sharing, particularly when back in 2017 Netflix was seen to be
    actively encouraging it. Some users were expected to be lost in the
    process but losing over 1 million users in a little over a month has
    major implications for Netflix and whether it decides to continue
    with its crackdown globally.

    Interestingly, there is no strong demographic skew to those who
    cancelled, signaling a more outright rejection of the password
    sharing clampdown. In a worrying sign for the next quarter, 10% of
    remaining Netflix subscribers say they plan to cancel their plan in
    Q2 2023, which is well above the average seen in previous quarters.”

  It’s just blanketly stupid to impose annoying and costly new
  restrictions at a time when streaming competition has become more
  heated than ever. Netflix’s competitors can now simply gain a
  competitive advantage by being less confusing and annoying on pricing
  and account restrictions.

  I don’t expect it to be fatal, but it sure as hell won’t help the
  company maintain leadership in an increasingly competitive and crowded
  field. Meanwhile, some analysts say Netflix’s predictions that it will
  be a boon for revenues [30]simply aren’t based in reality:

    Benchmark Co. analyst Matthew Harrigan, in a note last week,
    expressed skepticism that it would be a “growth game-changer,”
    opining that the strategy “cannibalizes full-ride member growth.” He
    pegged the incremental revenue lift at less than 4% revenue, even
    with generous assumptions about how many piggybackers Netflix might
    be able to convert to Extra Member accounts.

  But it’s also just another example of Netflix’s pivot from disruptive
  innovative to just another powerful corporation primarily interested in
  nickel-and-diming its existing customer base in a bid to please Wall
  Street’s insatiable need for improved quarterly returns at any cost. It
  doesn’t matter to many myopic investors if you’re sabotaging longer
  term product quality and company reputation.

  This inevitable pivot was first made fairly obvious when the company
  [31]began waffling on issues like net neutrality in 2018, and is all
  the more evident now. Much like [32]big cable companies like Charter,
  Netflix — a company that spent years [33]openly advocating for password
  sharing — now wants to pretend password sharing is some unethical
  financial nightmare, when that’s simply never been the case.

  Filed Under: [34]cable tv, [35]competition, [36]password sharing,
  [37]streaming, [38]tv, [39]video
  Companies: [40]netflix
  [41]40 Comments[42]Leave a Comment
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Comments on “Netflix Loses A Million Subscribers In Spain After Greedy
Password Sharing Crackdown”

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  This comment has been deemed funny by the community.
  That Anonymous Coward [50](profile) says:
  [51]May 2, 2023 at 5:53 am

  Somewhere in a board room there is a group of old men screaming about
  how could this happen and why did no one warn them this could happen.

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  Anonymous Coward says:
  [55]May 2, 2023 at 5:53 am

    The plan basically involves charging users an extra $2-$3 a month if
    it’s found that someone is using your account outside of your home.

  Like very long distance lorry driver with a subscription, or commercial
  air crew, who could change country country every day. Such people may
  also rely on a VPN to follow a series etc.

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  Paul says:
  [59]May 2, 2023 at 6:00 am

  It was honestly inevitable that this day would come. There is only so
  much subscriber growth a service can achieve before it plateaus, at
  which point the only option is to nickel and dime existing customers.
  It is one of the flaws in the subscription business model, hence all
  the price hikes and crackdowns on customer behaviour we’ve been seeing
  recently.

  Given subscription fatigue is very real and that people need to cut
  expediture due to the cost of living, I suspect this is only the
  beginning and it will affect not just Netflix.

  Personally, I have culled all standalone video subscriptions that I
  had. Now I only have Prime Video because it is bundled with Amazon
  Prime and Apple TV+ because it is bundled with Apple One. Netflix and
  Disney+ were both cancelled to save money.

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  James Burkhardt [63](profile) says:
  [64]May 2, 2023 at 7:09 am

Re:

  To be fair a Disney+ with hulu bundle saved me a ton of money, and
  almost isnt ever not on in my home.

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  James Burkhardt [68](profile) says:
  [69]May 2, 2023 at 7:11 am

Re: Re:

  **Saved me a ton of money over a Cable package.

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  Sabroni says:
  [73]May 2, 2023 at 7:19 am

Re: Re: and almost isnt ever not on in my home.

  Can I get some ranch dressing on that word salad plz?

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  James Burkhardt [77](profile) says:
  [78]May 2, 2023 at 10:41 am

Re: Re: Re:

  Due to my nuerodivergent roommate, Disney+ or Hulu is almost always
  running in the background with a content selection that dwarfs my
  ripped digital media collection, often in better quality.

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  PaulT [82](profile) says:
  [83]May 2, 2023 at 11:34 am

Re: Re:

  “To be fair a Disney+ with hulu bundle saved me a ton of money”

  In Spain, Hulu doesn’t exist, and Disney+ includes a channel named
  Star, which includes most of what is on Hulu in the US but for almost
  no extra cost.

  (I say almost because while, say, Prey was on there day one, there’s
  still nowhere to get the new Hellraiser legally).

  But, most things on Hulu in the US are just on Disney+ in Spain.

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  Anonymous Coward says:
  [87]May 2, 2023 at 8:11 am

Re:

  “at which point the only option is to nickel and dime existing
  customers”

  Why?
  Is it because the business model relies upon a continuous stream of new
  subscribers in order to be profitable?

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  sabroni says:
  [91]May 2, 2023 at 8:57 am

Re: Re:

  The problem is shareholders. If the business wasn’t paying them massive
  dividends it wouldn’t need to do this.

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  kallethen says:
  [95]May 2, 2023 at 9:10 am

Re: Re:

  It’s because of the mindset in the stock market that your company needs
  to show growth. It’s not enough to just have a profit. That profit
  needs to be better than the prior term, and next term’s profit needs to
  be higher than this term and so on.

  The mindset is dangerous because there will always be a point that
  growth cannot happen.

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  sumgai [99](profile) says:
  [100]May 2, 2023 at 9:13 am

Re: Re: Profits, the almighty king

    Is it because the business model relies upon a continuous stream of
    new subscribers in order to be profitable?

  No, it’s because of Wall St., which is overrun to the point of
  exhaustion with so-called 90-day wonders. In case you don’t know the
  term, it means that MBA’s with sawdust for brains think that the only
  measure of a businesses’ worth is how they perform over the shortest
  possible period, or 90 days. To be brief, they think that if your
  company doesn’t make a profit over the last quarter, then your company
  sucks, and should be shit-canned. Tbhat’s what we mean by Wall St., and
  90-day wonder(s).

  It used to be that a company could successfully “coast” with a very
  minor profit quarter over quarter, and year over year. But in the last
  two decades, and possibly longer, Wall St. has been on a tear, driving
  our economy into the ground in the name of The Almighty Dollar, and
  it’s close cousin, The Profit.

  And it shows in so many ways. For this discussion, Netflix had become
  conflicted between its history of outstanding customer relations and
  Wall St.’s insane desire to make more money than Croesus and Midas
  combined. In just 90 days. As an old man, I can remember when I used to
  make X dollars a year, and now the average Joe Six-pack makes that in
  less than a week. That’s inflation taken to the extreme, and I don’t
  see it settling down any time soon. Or as some wags put it, it’s all a
  numbers game, and he who wins is the one with the largest number(s).
  Bah! Humbug!

  (Sorry for the rant, but my trigger is hair sensitive on this
  particular topic.)

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  zeiche [104](profile) says:
  [105]May 2, 2023 at 6:03 am

  perhaps the anti-password sharing campaign is more about fairness than
  profits

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  Anonymous Coward says:
  [109]May 2, 2023 at 6:47 am

Re:

  That is no more true now than it was in 2017.

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  Strawb [113](profile) says:
  [114]May 2, 2023 at 7:52 am

Re:

  A publicly traded company with shareholders to please and appease
  making a decision that isn’t based on profit?

  LOL, good one!

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  Anonymous Coward says:
  [118]May 2, 2023 at 9:05 am

Re:

  Who is password sharing unfair to?

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  Black Asparagus says:
  [122]May 2, 2023 at 9:47 am

Re: Re: Who is password sharing unfair to?

  Shareholders?

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  PaulT [126](profile) says:
  [127]May 2, 2023 at 11:31 am

Re: Re:

  People who don’t understand how culture is shared and consumed.

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  Thad [131](profile) says:
  [132]May 2, 2023 at 10:14 am

Re:

  Yeah, that’s Netflix, all right, a company that famously [133]cares
  more about fairness than profits.

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  Anonymous Coward says:
  [137]May 2, 2023 at 6:08 am

  For every viewing, netflix already pays for that one time use licence
  per viewing. So if you view the same piece of content numerous times,
  netflix pays for each view to the copyright holders. So if you watch
  the same thing a few times, you must be sharing your account.

  This is not the fault of the consumer, and only a little bit of the
  fault of netflix. This is the fault of an insatiably greedy industry
  that provides nothing to society (read: copyright) but demand their
  pound of flesh. They dont care where it comes from, as long as its
  consistent. They dont care about if its sustainable, and they’ll be as
  harsh as possible to meet their quarterly revenue projections.
  Therefore, netflix feels it has to clamp down. But it hurts them, and
  no-one will use them, so everyone upstream hurts.

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  This comment has been deemed insightful by the community.
  Anonymous Coward says:
  [141]May 2, 2023 at 6:48 am

Re:

    So if you watch the same thing a few times, you must be sharing your
    account.

  … or have a 3 year old.

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  Anonymous Coward says:
  [145]May 2, 2023 at 9:00 am

Re: Re:

  Alternately, you may have someone in the household with a hyperfixation
  on that show/movie. This becomes far more likely when said household
  member has ADHD and/or is on the Autism Spectrum.

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  Anonymous Coward says:
  [149]May 2, 2023 at 9:45 am

Re: Re: Re:

  Or it may be your favorite music concert.

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  Anonymous Coward says:
  [153]May 2, 2023 at 8:14 am

Re:

  ” So if you watch the same thing a few times, you must be sharing your
  account.”

  That’s some rather fine capitalistic bullshit right there.

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  sumgai [157](profile) says:
  [158]May 2, 2023 at 9:30 am

Re: Re: Could it be?

  One has to wonder….

  If Netflix is truly paying copyright holders per viewing, then what’s
  preventing them from ‘under reporting’ those numbers? History.
  Hollywood accounting mandates that income will increase, period. By
  Netflix reporting that they are suffering subscribers defections, that
  number of views being reported back to Hollywood should be
  commensurately lower, right?

  It’s only fitting that Hollywood-accounting be turned back on
  Hollywood.

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  David says:
  [162]May 2, 2023 at 6:11 am

But a financial nightmare password sharing is!

    now wants to pretend password sharing is some unethical financial
    nightmare, when that’s simply never been the case.

  It is a nightmare. It’s just that letting your daylight decisions be
  governed by your nightmares’ fearsomeness is not likely to optimize
  your returns of investment.

  Entrepreneurship and investing is exactly about immersing yourself into
  stuff that has the potential to wake you up in sweat at night, but
  doing so while hedging your bets and keeping the ongoing expense sheets
  close to your chest.

  Companies that make it out of startup will garner more conservative
  accounting and rules in the process, with more of a focus on longterm
  sustainability. That is a problem if a fundamental part of the
  attraction to partners, customers, and investors had been based on an
  initial disregard for maximising returns.

  Retaining the intelligence for keeping expensive focusing points of
  attraction operative can be a problem when going public or otherwise
  placing the financing under more conventional management.

  Sometimes you have to embrace at least one nightmare and own it in
  order to differentiate your offerings from that of others.

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  Nimrod [166](profile) says:
  [167]May 2, 2023 at 6:51 am

  They lost me about ten years ago when they charged me for a DVD that
  I’d returned to them, without bothering to let me know they were doing
  so…on Christmas Day…overdrawing my account. It took me two weeks to get
  my money back, but the overdraft fee was mine to keep, thus effectively
  negating the refund I had to chisel out of them. People/corporations
  can steal from me ONCE. After that, they lose access to my money. Never
  let the same dog bite you twice. There is always another option.

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  That One Guy [171](profile) says:
  [172]May 2, 2023 at 7:12 am

So, how's that income looking there Netflix?

  Some users were expected to be lost in the process but losing over 1
  million users in a little over a month has major implications for
  Netflix and whether it decides to continue with its crackdown globally.

  Losing a million users is certainly going to hurt immediately but it
  sounds like they’ve got much bigger concerns to worry about long-term…

  In a worrying sign for the next quarter, 10% of remaining Netflix
  subscribers say they plan to cancel their plan in Q2 2023, which is
  well above the average seen in previous quarters.”

  … when your latest business decision has you slated to lose a tenth of
  your current customer base in the area on top of the million you
  already lost that’s probably a good sign that you really screwed up and
  should re-evaluate whatever you just did.

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  PaulT [176](profile) says:
  [177]May 2, 2023 at 11:30 am

Re:

  The problem is simply why people joined. At one point, Netflix were the
  only major streaming service. Then, mainstream studios left, they
  produced content that appealed to different markets, but they lost
  content.

  If you want to watch X blockbuster or Y TV series, it’s possible
  Netflix isn’t for you when they lose the rights to that. It’s not
  Netflix’s fault, it’s just that when someone decided they wanted all
  the revenue, they couldn’t offer it any longer. Netflix still has a lot
  of value, but if 10% decide to go because they don’t have The Simpsons
  or Friends any more, that’s not a commentary on Netflix’s overall
  value. It just means other people with veto power followed.

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  Anonymous Coward says:
  [181]May 2, 2023 at 7:41 am

    Netflix’s pivot from disruptive innovative to just another powerful
    corporation primarily interested in nickel-and-diming its existing
    customer base

  Oh dear, it’s happened again. I am shocked and bewildered that
  technical innovation has been followed by corporate exploitation. But
  I’m sure the next company to do something slightly novel that everyone
  trips over their dicks to lavish with unjustifiable praise will be the
  one to lead us all into the promised technotopia.

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  Anonymous Coward says:
  [185]May 2, 2023 at 7:49 am

   1. Hmm. That’s when I cancelled my Netflix subscription. Haven’t been
      back since; between free streaming options, Prime Video, Disney+
      and YouTube, I’ve seen 0 reason to watch Netflix since the other
      services stopped giving Netflix access to chunks of their content.
      No Netflix originals have looked compelling enough to me to wade
      through the ever increasing T&Cs and fees to see if, even after I
      subscribed, I’d have access to the stuff I wanted to watch.

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  Glen says:
  [189]May 2, 2023 at 7:59 am

  It’s just simpler to sail the high seas.

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  Anonymous Coward says:
  [193]May 2, 2023 at 8:07 am

Re:

  “First: sail!” doctrine?

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  Anonymous Coward says:
  [197]May 2, 2023 at 9:25 am

Re:

  Only if you wear period-appropriate gear!

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  Anonymous Coward says:
  [201]May 2, 2023 at 11:48 am

Re: Re:

  Just a pad should be fine, then

  (BUTTON) Collapse replies (1) [202]Reply (BUTTON) View in chronology
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  comment the last word (BUTTON)

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  Anonymous Coward says:
  [205]May 2, 2023 at 12:06 pm

Re: Re: Re:

  If you don’t look like Guybrush Threepwood at a bare minimum…

  [206]Reply (BUTTON) View in chronology
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  Anonymous Coward says:
  [209]May 2, 2023 at 8:09 am

    Netflix’s competitors can now simply gain a competitive advantage by
    being less confusing and annoying on pricing and account
    restrictions.

  Well, maybe they could, but a lot of them (HBO Max, Disney+,
  Paramount+, Hulu, Peacock) are subsidiaries or close affiliates of MPAA
  members; and the rest depend on licensing deals with members.

  I doubt it’s a coincidence that Netflix changed their tune around 2019,
  the same year they joined. And I suspect they know what they’re doing;
  that playing fast and loose with the rules was always a temporary
  growth strategy till people got hooked. Now that they have a seat at
  the table, Netflix can convince the cartel to enforce similarly onerous
  restrictions on their competitors.

  (BUTTON) Collapse replies (1) [210]Reply (BUTTON) View in chronology
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  PaulT [213](profile) says:
  [214]May 2, 2023 at 11:24 am

Re:

  “MPAA members”

  While true, this is Spain, and the rights to distribute aren’t
  necessarily the same.

  [215]Reply (BUTTON) View in chronology
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  adrian says:
  [218]May 2, 2023 at 9:27 am

  hello

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  PaulT [222](profile) says:
  [223]May 2, 2023 at 11:23 am

  Huh… I’ve not had any problems, even though I do share my account with
  an ex girlfriend in return for her paying for my YouTube Premium. As
  in, I’ve never even had a request to do something. Maybe it’s because I
  tied it with my Movistar+ account, but that does seem bad if those are
  accurate figures…

  Anecdotally, I know more people who view locally produced Netflix shows
  like The Snow Girl and ShKy High than have left, but I can imagine some
  leaving for free trials elsewhere then returning to see other things.
  The article says HBO and Sky, which have been heavily promoting free
  trials.

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