The thing with Netflix, though, is that they actively encouraged password sharing. They ran ads saying “Share the love, share your password.”
Plus they were not hurting financially when they changed this. Their profits were even up! But they weren’t increasing at the rate that investors wanted. They similar are not hurting financially now, despite the price increases and removal of cheaper options.
Other streaming services are mostly not profitable, and they tended to have terms that said you couldn’t share passwords. But, because Netflix was first and set the tone, people did it anyways. Most people never read the fine print or pay attention to how profitable a company is.
I think people are far more critical of how much they pay for screen-based entertainment, now that so much is available for free. If password sharing won’t help them save money, then they’ll just use other methods, like one-off subscriptions.
And that is my answer to the OP’s second question: I think they’ll start to try and stop that, by adding cancellation fees and such. That is, unless they can get enough people to treat it like a gym membership, and pay even if they don’t use it that month.
Probably what will happen is that if there is enough complaint and it looks like they will lose subscriptions over it, they’ll invent a different charging tier for families where you can watch from up to x different locations.
Seems like there’s some context here, particularly with Netflix. My other main reaction to the responses so far is that I’m skeptical of the idea that customers should have read the rules, been aware of them and then not complained afterward for being “caught” in some way.
For quite some time now companies have done their best to put out discouragingly long user agreements full of nearly impenetrable legal language. Most people seem to throw up their hands and just look for the ‘agree’ button, and I have little doubt that’s exactly the way businesses want it. I think it’s a dishonest and cynical practice. What should replace it? I don’t know. But being an informed consumer isn’t merely a matter of choice in this environment. It takes a good deal of effort and speaking only for myself, I’m not equipped to navigate the legalities of those monstrosities. I see them as just another tool for wringing as much money out of people as possible.
I’m doing a mass reply, because I wanted to kinda get it all done in one. First, @colinfred, as @doreen pointed out in the post right after yours, no, it wasn’t always that way. I’m a longtime Netflix subscriber, starting in the DVD era - and again, one of the selling points of that era was how many simultaneous DVDs one could have out at a time, much like how many devices can stream simultaneously began later.
For @Mangetout, you’re correct, but… as always with major companies, they can and do make one sided changes to the contract and you can agree, or you can drop the service. Otherwise I’d be paying less than $8 a month for my streaming service. NOTE - I’m not saying this isn’t the way it always is in the USA, but falling back on the contract, where only one side can re-write it isn’t a compelling argument to me at least.
And I know the replies aren’t in order, but @Thudlow_Boink - you’re right in what they choose to provide, but again, as just mentioned, they’ve changed it a lot over the years. I do agree from a technical and legal standpoint, yes, they do demand that only people in my HH use it, and yes, some households could use multiple streams simultaneously, but I can’t imagine that’s why they were selling plans with 4 simul-streams. They knew what was going on, and yes, they historically encouraged it.
But I’m not denying that we’re breaking the letter of the agreement, but Netflix has been extremely cavalier about their one sided dominance in the game, as well as riding on the coattails when they used to be the one-stop-shop. They just aren’t that anymore - fragmented streaming has killed their model, and the price increases have made me re-evaluate my need for the service. Heck, I’d have cancelled years ago if the costs wasn’t partially (originally 100%!!!) shared by T-Mobile, but they’ve doubled in price since those days.
For the record though, I have not ever shared the service, but felt that if I had shared (again 2 simul-streams) it would well have been within the “common sense” understanding of it.
Anyway, I’ll be voting with my dollars, my current billing cycle is through 9/10, at which point I’ll be switching to the $6.99 plan (with adds) which will be “free” after my T-Mobile credit.
Regardless of the ill-thought out advert doreen mentions, the terms for the streaming service has always been one household, (and the members of such out and about). Giving password to someone who doesn’t live with you to watch whilst you’re not present has never been kosher.
Edit: just clicked the link, not even an advert just a badly thought out tweet
It’s not really an argument - it’s just the reality of what happens when an individual contracts a non-essential service from a massive corporation. Full disclosure: I probably don’t care enough about movies to have a completely balanced perspective on this. If it was food or medicine or oxygen I would probably get a bit more exercised.
Speaking as someone whose support network is not a traditional family I find it frustrating to pay the same as someone else who actually gets to use the four devices they pay for. But part of the reason I don’t cancel some services l don’t use much is because I don’t want to disappoint my friends. If I can’t share I will get rid of some.
Presumably if you live alone, you’re not paying for the four devices-at-a-time plan. That’s the premium plan and they have a cheaper plan that allows two devices-at-a-time. And all but the cheapest ad-supported plan have the option to add extra members who don’t live with you (at $7.99 per extra member).
I wonder how that meshes with the scan-upon-entry thing? I mean, i I’ve got a Costco Cash voucher, but not a membership, what do they do?
Re Netflix etc, - I can see their point, but if they have a max number of devices they really shouldn’t care where it’s being watched. If I’m on vacation somewhere for 2 weeks and want to watch a movie on a smart TV there, while my son watches something at home, we’re part of the same household even so. Ditto when I set up the in-laws’ TV to use my Netflix etc (not that they ever did).
Someone correct me if I’m wrong, but I think the way it works is if this happens for more than x days in a row (a week?) flags go off. BUT, if you’re watching on a mobile device (phone, tablet) that does not count.
They already have that on some highways: near us, there are several HOT (High Occupancy Toll) lanes. Anyone can drive them - but if you have enough passengers in the car, you can flip your EZ Pass to a different setting and you don’t need to pay the toll.
I’m sure that’s true, which means I chose a poor example.
I was trying to imagine car companies going overboard on the subscription model and getting people to pay to unlock extra capabilities that are already engineered into the car. Extra engine power? Sun roof? I suppose it’s not all that different from paying up front for those items. But it somehow strikes me as obnoxious to build the car with those features, but not allow their use unless you pay more on a monthly basis. Anyone care to tell me if I’m creating a fictional villain here, or is this something we are likely to see?
No, the auto manufacturers are already offering or considering offering subscription-based features. The OnStar service and similar things from other companies are probably an early example.
I don’t pretend to know what was in the terms ever since streaming came into existence - but that tweet , ill advised as it might have been and the numerous times Reed Hastings was quoted saying things like " “We love people sharing Netflix,” means it was absolutely not clear that what was meant was sharing only between people who live together. Nobody understands " We love people sharing Netflix" to mean everyone in the household doesn’t need their own individual account. It was always assumed, just like four people in the same household are not required to each have their own cable account.
Unless you want Watch in 4K (Ultra HD) + HDR which is only available with the most expensive plan with four devices at a time. Which is the cause of a lot of complaints.
Is it worth it, though? Is enough content available in 4K with HDR to justify the cost? Because I’ve had a 4K OLED set for several years but I don’t think I’ve gone to the trouble of seeking out 4K content.
I don’t know - I just know I’ve heard a lot of people complain that they can’t get the Ultra HD without paying for four screens when they really only wanted one or two.
Imagine if you hire a lawn service provider to service the lawn. The contract says service provider will maintain the lawn for you and your household at 123 Random St, Anytown USA for $X/mo. Every few years you renew the agreement at a higher $X. If your son moves out of the house to 456 Random St, is it fair for you to expect service provider to maintain your son’s lawn without changing the contracted fee?
Okay, you say, but I’m paying the lawnmower for work not yet performed and I’m paying Netflix or Disney+ for access to work already performed. If the lawnmower does my house and my son’s house, that’s twice the work which is unfair. If both me and my son stream on the same Netflix or Disney+ account, it’s not like they have to film twice as many shows. They’re doing pretty much the same amount of work so it’s fair.
This is a bit tricky. There is some actual “work” involved in storing and transmitting data to customers. For every subscription dollar Netflix takes in, roughly 58¢ is spent actually delivering entertainment services to its customers. Only 37¢ on the dollar goes to producing/acquiring content1. If I use the service as much as an average subscriber, and my son does too, but we’re only paying for one subscription, Netflix could end up losing money. If too many people do this, then Netflix would have to raise its rates to break even.
That doesn’t change the fact that two people residing in the same household might stream the same amount of content after one moves away, so in that sense the service provider isn’t doing more work. But recognize that the household deal is a potential loss leader designed to rope kids in and build a base for future subscriptions.
~Max
1 For FY2023, Netflix reported some $33.7bn in revenue of which $19.7bn was designated cost of revenue. Under expenses, Netflix reported spending $12.5bn on additions to content assets. Per the report, revenue from advertisements presented on Netflix’s streaming service was not material from 2020-2023. See Netflix’s 2023 Form 10-K, pp. 39-41, available at https://s22.q4cdn.com/959853165/files/doc_financials/2023/ar/Netflix-10-K-01262024.pdf#page=41