Since March, Netflix has been experimenting with ways to limit sharing of accounts outside the home in several South American markets — pending a more general rollout. But the sauce does not really take, and subscribers remain puzzled.
Paralyzed by the loss of 200,000 subscribers in the last quarter – and by even more alarming forecasts for the future – Netflix is trying by all means to bail itself out. Among the avenues explored, the fight against account sharing seems to have become a real battle horse in Los Gatos. As a reminder, a user is not supposed to communicate his identifiers to people living outside his household so that they can use his Netflix account. It’s even listed in the platform’s terms of use. But in fact, Netflix has never really acted to counter this practice, which is now widespread. According to some analysts, it would however represent a loss of 2 to 6 billion dollars per year for the firm of Reed Hastings and Ted Sarandos.
€2 per additional account
At Netflix, we therefore consider that things must change, and quickly. Before launching headlong into a global war against account sharing, N rouge targeted three South American markets to experiment on the subject. Since March, subscribers in Chile, Costa Rica and Peru are therefore expected to pay a supplement (about €2) for the creation of a profile outside their home. But as the site reports rest of the worldnot everything goes as planned.
It is no coincidence that Netflix chose these specific countries as their laboratory. Central and South America representing the lowest revenue per user: the financial risk is lower if the experience is short and users decide to leave the platform en masse. In addition, the firm has a comfortable lead over its competitors. According to data from Ampere Analysis, Netflix accounts for 41% of subscription streaming consumers in Peru, compared to 20% each for HBO Max and Disney+.
Instructions that lack clarity
It is precisely on the Peruvian market that rest of the world got interested. The observation is clear: two months after the launch of the experiment, it’s a mess. As expected, some users immediately canceled their subscription. It must be said that with such low prices, the slightest increase can be very bad for the wallet. Others simply ignored the new policy and continued to share their account outside of their home, while some weren’t even officially notified of the change.
Asked by rest of the world, a customer advisor from N rouge in Peru also shared her uncertainties about the new policy. Because this raises another problem: what if a member of my household leaves it temporarily and wants to watch Netflix from another place? According to the consultant, these kinds of cases require the use of a verification code by the main user — but in this case, why not systematically use this technique to perpetuate the fraud?
Netflix in the sights of associations
It’s possible that Netflix is testing different degrees of restriction on different groups of subscribers, which doesn’t help allay the confusion. In addition, local consumer associations criticize the American service for not being sufficiently clear about the notion of “home”, which can also be understood as all the members of the immediate family – Netflix has since confirmed that it was only people living in the same building. Some associations also perceive the differences in treatment between users as arbitrary discrimination, and demand an investigation.
There is therefore still a lot to do for Netflix, which will have to refine this new system before launching it more generally. As a reminder, the Los Gatos firm intends to extend its plan from the end of 2022, in tandem with the arrival of a cheaper formula supported by advertising.