We are seeing many interesting attempts to gain revenue, without losing subscriptions, from streaming services this year. To date, Netflix has resisted the overall industry trend to use AVOD-tier subscriptions as a way to bait new domestic consumers. This week, we’ve seen them announce that they will enact a soft crack-down on password sharing for Netflix accounts, a common way for multiple families or households to access different streaming services, instead. Brandon Blake brings the entertainment lawyer perspective.
Test Program
The streaming giant won’t be suspending the ability to share passwords completely, however. Instead, it’s enacting a ‘password share’ fee when members outside the house access the services. For now, this will be enacted only in key South American territories, including Chile, Peru, and Costa Rica, with the intent to move it to a wider roll-out if accepted.
Netflix is, currently, one of the easiest streaming accounts to share, allowing for individual profiles and multiple streams at one time. Clearly, however, they are keen to get back more internal control over how this is used.
Terms and Conditions
Their existing terms and conditions do already specifically rule out password sharing outside of a household, so in fairness, the tightening, rather than outright banning, can be seen as an attempt to meet consumers at the point where reality intersects with strict legality. This isn’t their first attempt to bring the phenomenon under control, either. A March 2021 attempt saw them enact profile verification through text messages.
With the streaming market getting much more competitive, however, it appears they are now willing to consider a ‘meet people where they are’ model. The higher content demand is certainly driving a demand for revenue to match, allowing streamers to create fancier projects and fund bigger budgets. Monetizing freeloaders, rather than merely banning them, may be beneficial to the service overall, and may create less bad feeling among existing subscription holders.
Will people pay, or simply leave? That remains to be seen, but Blake & Wang P.A will be following the results with interest.
