Password sharing is no longer a phenomenon reserved for a few broke college kids, and it could have very serious consequences for everyone in the entertainment industry. So why isn’t Netflix’s chief financial officer worked up about the five people mooching off your single Netflix account?
“If they don’t use [the service] within the terms of use, we’re not happy,” CFO David Wells told analysts at a conference in New York on Tuesday. “We could crack down on it, but you wouldn’t suddenly turn them all into paid users.”
More likely is that doing so would loosen some of the glue that keeps you subscribing — if you don’t have someone in your life asking you why they can’t watch “Marvel’s Luke Cage,” you might be more likely to deactivate your account.
And Netflix doesn’t allow free-for-all streaming anyway. In the U.S., there are three Netflix plans, which allow different numbers of simultaneous streams: For $7.99 a month, you get one standard definition stream at a time. For $9.99, you get two high definition streams at a time. And for $11.99 you can watch at the same time as three others, and in 4K, if you want.
If anyone else attempts to start a stream, a message pops up asking them to either wait until someone else stops watching or open another account.
“It’s more like, ‘The service doesn’t cost that much, so why not get your own?’” Wells added — a suggestion, rather than an admonishment or accusation of criminal activity.
As for the cost, while Wells didn’t say subscribers would be seeing another price increase any time soon necessarily, he also had to assure the investors in the room that his company would be able to squeeze more money out of its customer base.
“We think as we add more value and add more content to the service, we can raise ASP (average subscriber price) slowly over time,” Wells said. Some of that growth might come through pushing more desirable content to different tiers, or allowing more concurrent streams.
Those price increases will allow the service to continue to operate ad-free, though. Rumors keep swirling about Netflix possibly introducing an ad-supported tier, to draw in subscribers who might want to pay less than the $8-a-month the lowest tier costs, but Wells denied that that’s a model in which the company is interested. “As a brand, Netflix stands for no advertising,” he said.
Besides, you’d probably just block the ads anyway.