How Netflix wants to limit the number of users who watch its content for free

Faced with its first drop in subscribers in 10 years, Netflix is ​​poised to stagnate after a decade of growth. In the first quarter of 2022, the streaming platform lost 200,000 of its 221 million subscribers. From afar, this loss may seem like a drop in the ocean for the California giant. But this shortness of breath worries investors. “Management has made it clear that we can only expect very weak growth in 2022 and 2023.”This is stated in the report of Bank of America analysts.

In order not to lose money despite this slight drop in subscribers, Netflix wants in particular to attack viewers who watch its content without paying thanks to shared identifiers. The American company estimates that about 100 million people get access to the platform for free. With a Netflix subscription, the customer can indeed watch videos on two, three, or four different screens, depending on the subscription. This often encourages users from different households to share a subscription. What forbids, however, is Netflix’s usage charter, which only allows screen sharing within the same family.

“When we were growing fast, it wasn’t a priority. And now we are working hard on it.— acknowledged co-founder Reed Hastings during the presentation of the results for the first quarter of 2022. “We don’t want to stop this exchange”nevertheless warned Gregory Peters, operations manager, but “convert better” this is a misrepresentation of income.

“We have a friend who is subscribed to all platforms and he gave us his accounts”

With the advent of streaming platforms (Netflix, Dinsey+, Prime Video, MyCanal…) ID sharing has become a very popular practice. But in case of restrictions on the exchange of access codes, are the “secret” users ready to get a wallet?

“We have a friend who is subscribed to all platforms and he gave us his accounts. If he stops the subscription, I think my girlfriend will want to keep Netflix. I really do not know. Either only Netflix or nothing.”explains Gael, manager of a humanitarian association in Lyon.

“We watch MyCanal because of my parents’ codes. But if they stopped the subscription, we wouldn’t renew it. We would not subscribe to the platform because of the prices and the fact that we can watch series on “pirate” sites. I don’t have much doubt when we watch big shows.”says Antoine, a young man in his thirties at an urban planning company.

On Netflix, Documentary Series

Users who enjoy account sharing without paying Netflix should do well to change their minds without rushing them too much so that they turn to other platforms or illegal streaming sites. “This issue is outside the scope of Netflix and affects all video-on-demand (VoD) platforms. In the first quarter of 2022, Warner also faced such a problem with its platform.”says Louis Viart, professor at the Free University of Brussels and expert on streaming platforms.

According to this researcher, Netflix also developed through account sharing, which allowed the American giant to very quickly establish itself to a large audience. “This practice of screen sharing between people from several different households was tolerated by Netflix and played a role in the development of the platform by encouraging the consumption of its content.”

The return to this feature may be misunderstood by the public.. “There is a risk of damage to the brand image if Netflix stigmatizes how its customers use its services. This is also a very common practice. The second risk is increased piracy. Of the 100 million people who consume for free, one can imagine that a part will not want to pay for Netflix”continues Louis Viard.

Netflix headquarters in Los Gatos, California.  (JUSTIN SULLIVAN / AFP)

To find out what the public is willing to accept regarding the ID swap, Netflix has launched a series of full scale tests. In South America, the VoD leader will experiment in three countries: Costa Rica, Peru and Chile. Subscribers will be required to pay a fee on top of their monthly subscription (approximately $3 in Chile, $2.99 ​​in Costa Rica, and $2.12 in Peru) to be able to add up to two additional accounts to their profile.

“We’ve always made it easy for people who live together to share their Netflix accounts with features like separate profiles and simultaneous streams for our Standard and Premium subscriptions. While these features are extremely popular, they also create some confusion. about when and how to share Netflix”This was announced on March 16 by Chengyi Long, Director of Product Innovation at Netflix.

The second option is being tested: “underground” users who have used subscriber codes can switch their profile (which records their preferences, current views, etc.) to a new account. “The goal is to encourage people who benefit from account sharing to follow themselves while keeping their history.”notes researcher Louis Viart.

“There should be a check to see if we live in the same family, but we have not received anything”

In 2018, it was Spotify, the leader in music streaming, that tried to curb the overreach of its “family” service, which lets you access the platform from multiple screens. “They changed the terms of use of the family account, more precisely controlling the address of users in order to limit its use to people from the same family. Spotify first tried to control where users live through geolocation. But faced with the wrath of users, they retreated. Since then, they have controlled the address by sending subscribers identity verification requests, ” notes Louis Viard

According to users, this increased control over Spotify is not very effective. “My parents have a Spotify family account and I use it without living with them. There should be a check to see if we live in the same family, but we haven’t received anything. It’s more like an announcement effect.”, Quentin admits. He lives in Rennes, a few dozen kilometers from his parents.

Promotional poster for the French TV series Lupine (which is streaming on Netflix) in Krakow, Poland on June 13, 2021. (BEATA ZAVRZEL/AFP)

The risk for Netflix with this policy of restricting access to its platform is losing subscribers without acquiring new ones. On social media, many netizens say they are waiting for exclusive and quality series and movies to come out on Netflix, which has been facing increasingly strong competition from Prime Video and Disney+ in recent months with big productions on offer.

But the problem is that production costs for Netflix are exponential, jumping from €1 billion in 2010 to €20 billion in 2020. “The real question is, does Netflix produce content that satisfies their audience? On social media, fans point out poor production or production that doesn’t live up to expectations.”notes Louis Viard.

“In a competitive environment, it takes a lot of content to attract viewers. If Netflix still has more subscribers than others, when it’s easy to unsubscribe, it’s because it’s still perceived as the best value for money.”nuance Julien Piyo, junior research fellow at CNRS and specialist in the digital industry.

On Friday, May 13, Netflix announced the end of the French series. Funnycritically acclaimed, so there will be no second season. When asked about the reason for the non-renewal, Netflix mentioned the need for a fair relationship between “audience and cost of production”. An arbitration that viewers may not hear with the same ear.