Due to Netflix's annual price increases and the severe lack of sitcoms, sharing accounts may be more attractive than a monthly subscription fee. But how does Netflix share accounts and why did not the company cease the practice?
Everyone Shares a Netflix Account
When we say "account sharing," we're not talking about sharing an account with your family. This is a practice that violates the Netflix Terms of Service: sharing an account with friends, neighbors, Internet strangers, and other adult adults with whom you do not live. This practice is widespread; It is practically a touchstone of modern culture. With every nasty separation, unpleasant intervention, or sudden friendship drama, someone wins or loses a free Netflix profile.
Twenty-four million people use a Netflix account, which they estimate they will not pay for by Cordcutting.com. That's a lot of people. If there were an estimated 24 million people using your product for free, would not you be upset a bit?
However, Netflix needs to know that there is a problem with sharing accounts. Again, this is practically a part of our culture. How does Netflix handle the sharing of accounts and how much is lost?
If you can not beat them, offer family plans
The punishment of account sharers is not worth the risk. If the company is writing an algorithm for recognizing account shares, there is a possibility that families may be misappropriated or blocked from releasing an account. That's just bad PR.
Like a seasoned fighter, Netflix chooses to spin. The streaming service has made sharing accounts more attractive by adding a feature to Profiles. Netflix also offers premium packages that allow Netflix to be displayed simultaneously on up to four devices. These family plans are beneficial to account users and give users a reason to pay Netflix an additional $ 7 per month.
While it's warranted to argue that family plans and profiles exist for actual family use, it's hard to deny that these features make sharing accounts very easy – even for the person who pays for the account ,
Account sharing is of great benefit to Netflix.
Sharing accounts can save you a lot of money. Reed Hastings claims the company is "good" despite shared account management, but how much money does Netflix lack?
Netflix estimates that Netflix charges about $ 2.3 billion a year, according to Cordcutting.com. Yes, this estimate assumes that every Netflix bum would actually pay for an account when needed, but it still gives you a pretty good idea of the money Netflix is missing. If even a third of the account holders would pay for a Netflix account, the company would spend an additional $ 660 million each year.
For a company with $ 12 billion in debt, this money could be a valuable asset. Should these estimated losses impact Netflix? No not true.
First, Netflix's family plans are a concession to these losses. A four-screen Netflix Premium account costs $ 7 (or 43%) more per month than a Netflix Basic account. Technically, these premium plans will provide Netflix at least $ 100 million more per year, provided the 24 million Netflix bums sign up for premium plans.
In addition, sharing accounts of the Netflix brand helps to compete with Hulu's aggressive marketing tactics. Hulu, recently acquired by a billion-dollar company called Disney, intentionally works at a loss. Basically, the streaming service offers its base plan for unsustainable $ 6 per month to get Netflix out of business. Even if a Netflix subscriber moves to Hulu, he can still keep up with the Netflix brand by signing up with a friend.
Algorithms May Stop Sharing the Account
Why did not Netflix stop sharing the account? It's possible that the company does not really care about sharing accounts. However, it's also possible that Netflix does not have the resources to accurately find and penalize account shares. If the company introduces an algorithm that detects and blocks account shares, it may inadvertently penalize legitimate account shares such as family members or roommates. This approach would be grossly unfair, jeopardizing the legitimacy of the Netflix family plans and damaging the Netflix brand.
This is where Synamedia comes into play. Synamedia, a UK company formerly owned by Cisco, was recently introduced A "Credentials Sharing Insight" algorithm that "turns occasional password sharing into incremental revenue." Basically, this European company has an algorithm that accurately recognizes the sharing of accounts. It is able to display a user's habits and habits to determine when non-paying viewers log into an account. It can tell if a user is "in his main house" or in a "cottage". It can also detect if a subscriber has "adult children who do not live at home" so that streaming services do not penalize the wrong people. For sharing accounts.