Freeloading or fair use? Where is this headed?

In My Humble Opinion
1

Not sure if this is merely an opinion question or a debate, but I’ll start here…

There was a CNN article today about various companies tightening their policies on sharing membership privileges, such as Netflix and most recently Costco:

I’m not sure how I feel about this, partly because I’m not a customer of either of those companies. But I do have the sense that even if I considered these moves appropriate, other businesses would love to make rules along these lines that I might find onerous.

We already have a lot of products, particularly software, that are moving away from ownership and toward subscription. Supposedly, some car companies are experimenting with charging fees to unlock certain automotive features which, if true, strikes me as crossing a line. Although I’m not usually a slippery slope person I can’t help but wonder where this sort of thing might go. One day might they try to charge us for having more than one passenger? Certainly, businesses are incentivized to wring as much out of customers as possible up to the point that they get fed up and spend their money elsewhere. Where is that point?

Returning to Netflix, it’s hard to come up with completely analogous comparisons, but back when we rented movies on tapes and DVDs there was nothing stopping us from handing it to a friend so they could watch it. Streaming tech has obviously changed this equation, so here are the larger questions as I see them…

Do these recent examples constitute reasonable behavior by companies?

If so, what similar policies might be seen as going too far?

2

I feel this is two distinct scenarios, so I have two answers.

For Costco - it was always a membership, with no shared privilege outside the named individuals. IMHO - if it’s important enough for your friends or family member to shop there, then you can just accompany them - problem solved. If they’re going every week, or every other week, they should probably have their own sub. All said and done though, it’s not like they’re giving anything away (except certain loss leaders, which could be part of the issue) so I’d think they’re still making money without tightening, even if less than they obviously want.

For Netflix, I’m a bit more pissed, because an existing feature, and one that was a much bigger deal in prior packages was simultaneous play/steams PER account. If I had paid to stream on 4 devices simultaneously (my account is currently 2 devices, and I’ll probably be dropping to their ad based version soon due to my limited use) they shouldn’t care about WHERE said devices are, because I’m paying for that many simultaneous streams.

So, I am somewhat more supportive of Costco, and giving Netflix the evil eye. It’s possible I may be somewhat hypocritical in my opinions, but there you go.

3

Last I read, Costco’s profit is almost entirely from membership dues. They sell goods at wholesale cost, plus a markup of a couple percent.

My local Costco has recent deployed scanners at the entrance. You wave your membership card under it, and your face displays on a screen for an employee to see that they match. No more handing your card off to someone else.

But you can always take a guest in with you, so it’s not really a burden. And since Costco is one of the more progressive employers, I give them the benefit of some trust.

4

Plus, you can buy Costco gift cards, which let anyone shop there. Why would they do that if they weren’t making a profit?

5

They do make a profit, but it’s not their main profit center. And it’s always good to move product.

6

The scanners are being deployed at all Costco stores. And, by the way, their rules say that the second card is only for use by someone living at the same address as the primary cardholder, so I’m violating their rules since I live in a different state than my mother.

7

I guess some stores were more strict than others. My husband once lost his card (dual membership) and tried to use mine (I wasn’t with him) and they checked the photo and told him no.

8

And get more people exposed to the Costco world, making potential members.

9

Do you have to have a membership to buy their gift cards?

10

I’ve bought stuff from Costco.com for delivery without a Costco membership. I think the prices are slightly higher for non-members but some things were cheap enough that it was worth it.

11

I’m not familiar with Netflix’s rules, but if they are clear about what those rules are, it seems to me that people aren’t entitled to resent them for enforcing them. Are they clear up front about what you’re getting and what you are and are not entitled to do for the price of your subscription?

12

Netflix was always for ONE HOUSEHOLD ONLY. This has been the case since the beginning. You can use Netflix whilst out and about, but no sharing with people who don’t live with you. This has always been clear and people complaining about enforcement are being disingenuous

13

Maybe they are now - but they haven’t always been.

Love is sharing a password and all that.

I’m not even sure the “crackdown” is meant to keep people from sharing with a friend or relative - they had to have a method where I can watch away from home because if I can only watch at home, not at a hotel, not in my dorm room, not on a plane , not at work a lot of people are going to cancel. Thing is , any method that allows me to do those things also allows me to share with my son/cousin/neighbor. Saying " This device is not part of your Netflix household" and wanting a code doesn’t prevent someone from texting me and asking for the code or me from giving it to them. Neither does a requirement that the device be connected to the subscriber’s household internet once a month. It will eliminate some sharing - if my son’s/cousin’s/neighbor’s ex is using my account, they will probably not be able/willing to text me for the code and won’t be coming over regularly to connect to my internet.

14

It is a contract that has terms attached to it - people freely enter into the contract, or don’t; this greater attention to enforcement of the contract terms is obviously motivated by profit, but profit is the reason the streaming providers exist (regardless of how it might appear that their mission is to provide entertainment etc).
I heartily support people’s right to complain about stuff they don’t like. Maybe the weight of those complaints, accompanied by the pressure of people voting with their feet, will bring about an adjustment of the contract terms, or maybe it won’t. I don’t really think this is a question of legal fair use or precedents/analogies that are based on how we used to handle videotapes and DVDs.

If it was some life-sustaining service like clean water or medicine, I would lean way over the other way (away from ‘oh well, market forces and all that’) on this.

15

I do believe that subscriptions should be sharable within families, and even Apple acknowledges that with family share where apps bought on the parents account can also be loaded onto the kids device as well. Hell I’ve been to a few countries that kids are often not charged for meals or transportation, just their parents.

I do feel such policies, as now we have been heading in the context of the OP are capitalist attacks against families to try to maximize the amount of money they can charge at the expense and detriment of the basic unit of humanity. The concept that it is fair to share among family members as a human right is changing where each family member needs their own individual subscription.

I also think that is where it will hit the blowback. People are waking up and seeing this attack against families and there will need to be a balance that I do feel will ultimately side with families, and as such will allow some spillover to that allow greater sharing.

16

Well, I consider it cheating, therefore my choice of the OP options is “freeloading”. A friend of mine actually boasted that he shared the membership of one streaming service with a friend and she reciprocated by sharing her membership to another service that he didn’t have. He wanted to do the same thing with me. I refused because, if a streaming service is being hurt financially by this kind of cheating, it’s going to raise the membership fee for ALL members, and that means the honest ones for the most part. Also, it may reduce the quality and variety of the programming that they offer.

17

I’m not sure what you mean by “shareable within families” - I’d be really surprised if there was any country where my 35 year old son who doesn’t live with me wouldn’t get charged for meals or transportation so I assume you are talking about “kids” under a certain age there, young enough that they would be part of a parent’s household. , Then of course you have to define “family” - can I share with my second cousin once removed? You may not know yours, but I know mine. Or do you limit it to five additional people who may not even be family, like Apple?

18

This is obviously true, but it is really striking just how long both sides of the deal have been pretending it isn’t.

This generalises not just across streaming services, but across all kinds of “tech” businesses. The mantra, for Netflix and Disney and Uber and WeWork and MoviePass et al, has been “growth first”. If you could scale up so much that you were effectively the only game in town, that near monopoly would translate into unlimited profit. And therefore it was well worth taking a big loss by giving away your service for much less than it cost.

And while there was an apparently unlimited funnel of venture capitalist money to play with, this sort of worked. A service was provided, user-bases grew, everything was going according to plan. And let’s all take a moment to appreciate what we had. Any time we took a ride-share home then used a third-party app to order pizza delivery before settling down to watch a recent blockbuster for free on streaming, we were having our lifestyle subsidised by billionaires. I mean, literally, the Saudi royal family paid for you to have food brought to your door.

However, it turns out that a) that supply of VC money wasn’t as infinite as we hoped, b) investors do at some point want to see a return on their money and c) if everyone’s trying to scale up by offering massive discounts, no one gets that sweet, sweet monopoly because we as consumers simply take every last offer.

So now, CEOs are starting to listen to the accountants and doing boring old-fashioned stuff like “controlling costs” and “justifiying investment” which means that cracking down on account sharing, and raising fees, and maybe not paying A-listers billions to be in a glorified soap opera is the order of the day.

And you can indeed blame consumers for taking the piss with sharing accounts, but particularly with streaming services there really has been a vibe that the end-goal was “you can watch anything you want any time and it shouldn’t cost you a penny” and in the light of that (and the non-existent enforcement to date) it’s hardly a surprise that people felt this was just the way things were done.

Unfortunately, we will all now have to get used once again to the idea that stuff costs money.

19

Simply I mean that I believe will be the blow back point against individual subscriptions. Where that line falls IDK but I do feel it will generally err on the side of families to the point where some outside sharing (freeloading) will be inevitable.

20

The way Netflix handles it isn’t too bad. If you try to log in from somewhere else where it doesn’t think you should be able to use it, you are given an option to choose to watch anyways–but only a limited number.

The people who suffer the most are people who move around so much they don’t really have a home.

IMHO, other programs should do similarly. Make it like newspaper subscriptions with free articles.