not so long ago Netflix even encouraged its users to share an account in order to afford a subscription to the platform, but those times were definitely behind with the announcement of its new policy. In fact, even they blame to this practice of not being able to make better content, since “there are more than 100 million households that share their accounts, which reduces our ability to invest in the creation of great stories, told with series and films of the highest quality“.
As expected, this change by the company has unleashed anger on social networks, leaving for the moment the question of how many will limit themselves to complaining and how many will actually unsubscribe. Surely Netflix has carried out more than one study to conclude that it was worth doing something like this, but theory is one thing and practice is another. I am quite clear that the platform he has shot himself in the foot with this new strategy.
A very risky move
On the one hand, let’s focus solely and exclusively on the big change: the ability to add sub-accounts at an additional cost. The first incomprehensible detail is the comparative grievance with Portugal. There the subaccounts will cost 3.99 euros each compared to 5.99 euros in Spain, an unjustifiable difference from any point of view, since the basic plan costs the same in both countries, while the standard goes to 12 .99 euros in Spain compared to 11.99 in Portugal, with the difference being 17.99 compared to 15.99 in Premium.
I am aware that this is not something that people have complained about so much, since right now most are in the phase of anger, focusing solely on what they consider to be a complete injustice and lashing out at Netflix head-on for it. It will be later when they find out about it and maybe they will get angry again or it will simply be the last straw for those who had reluctantly decided to continue with their subscription.
What Netflix wants to achieve: that a subscription shared between four users becomes four subscriptions.
What Netflix is going to achieve: that subscription disappears and that those four people continue watching their programs in a pirated way.
— Juan Naranjo 📚 (@Juan_Naranjo_) February 8, 2023
Of course, some will say that now they switch to torrenting or similar solutions, others will say that there are other platforms and that what Netflix offers is no longer worth it. The bottom line is always the same: a massive loss of subscribers. And on top of that, blaming them for not being able to improve at a time when the image of the platform was not exactly at its best, largely due to the overdose of cancellations that have been alienating viewers of all kinds.
Did Netflix really have another outlet so as not to get stuck? It may not be, since the competition is increasing and we live in a society that seeks infinite growth, even though that is impossible in most scenarios. Streaming is one of them, since what was sold to us as a revolution to have immediate access to everything we wanted at an affordable price is gradually proving to be unsustainable.
From Wall Street They have already begun to demand changes to the streaming platforms with clear objectives: to earn more money and start to be truly profitable. There you had to choose between promoting a friendly image with the public or focusing on the income statement. Obviously, the second was always a priority, but now it has become so in an absolutely blatant way in the case of Netflix.
You have to change other things first
In addition, from Netflix it seems that they have forgotten that they are the most expensive streaming platform by far. This is due to their different types of plans, a practice that has become obsolete in current times. What’s the point of being the only one that discriminates by image quality when that doesn’t happen in the competition? That if you want to see their catalog in 4K -at least the one that is available- you have no choice but to pay 17.99 euros. And that there are plans that do not even have Full HD available is nonsense today.
Thereby it can be argued that Netflix was basically forcing many to have to pay more than necessary and that the solution of shared accounts was something inevitable. If even they encouraged it! But reality has changed and it is not worth adapting to this change only with a price increase. Don’t want people to share account? Ok, but first update your outdated pricing policy. A single plan (or two, if we take into account the one with the ads, that goes separately) with a more adjusted price. And there the subaccounts would make sense. Some would reject it anyway, but it couldn’t be argued that they do it solely to make more money.
What we are left with now is that Netflix is in a similar situation to that of blockbusters when he refused to buy the streaming platform and then went under shortly after. In the case of Netflix, I don’t conceive of such an accelerated decline, but I do see it as increasingly probable that it will lose its leadership in the streaming war, and I’m not sure that it can afford something like that.
In his favor plays that none of its main competitors is yet ready to play in the same league -it is only necessary to remember how far “The Lord of the Rings: The Rings of Power” was from many Netflix series when Amazon sold it as an unprecedented success for that platform- and that it is inevitable that some other platform ends up falling or being absorbed in the short or medium term. It will be then when we see the true muscle of the dominant ones, but it is clear to me that clients will increasingly have to pay more for access to all of them. Some will endure and even continue to grow, but others will not have the same luck. That the bank account of the users is not infinite.
Now there is no other wait a bit to see the exact effect of this change in relation to shared accounts, because the initial catastrophism is one thing and another is exactly how it will be executed. If it’s too restrictive, more people will get upset and leave, but if it’s too lax, it’s hardly going to help. It is clear that it is a logical step from a business point of view, but that does not mean that it is correct, that we are all wrong, but an error here can end up being calamitous for Netflix. And his arguments for you to stay are, at least for now, pretty weak.
In Espinof: