Mooch No More: Netflix's Password

Have an in-law or know a student who doesn't live with you but wants use your Netflix login to watch Warrior Nun on their big-screen TV? They'll probably be out of luck: Netflix is putting an end to password sharing. Once it hits the accounts of US users, they can no longer access an account from outside the home of the main account holder (unless they're on a mobile device, among other workarounds). The ban is already in place in several other countries.

When a company as big as Netflix makes a change like this, the backlash is quick, even if it's seen only in polling. When Netflix announces a price increase, people say they'll quit the service—yet it has raised its rates almost yearly since 2014. When Netflix says it'll stop renting DVDs, people say they'll quit. (Qwikster, we never knew ye…but you'd be close to dead by now had you launched.)

The polling is, of course, always interesting. This year, CordCutting did a survey of 927 people who use streaming services to see how many were "moochers," logging into another person's account or accounts, and found the number to be 16% for Netflix. Same for Disney+. The percentage is lower for other streaming services.

CordCutting claims that even with that low number of moochers, the cost of password sharing to the industry is around $2.3 billion annually. Thus, the belt-tightening. It's happening at all streaming services—Max is shedding content, Netflix is cutting its spending, and Paramount is experiencing huge losses thanks to the growth of Paramount+ and Pluto TV.

Netflix has no choice but to try to stop the password-sharing revenue killer. The bottom line and the shareholders must be appeased.

CordCutting also surveyed 752 Netflix-specific users and broke the news to the 10% of them who didn't know what would happen with the password-sharing crackdown—including the added $7.99 per month they'll have to pay to add someone outside the main household. This is no doubt a push to encourage moochers to move to Netflix's new $6.99-per-month, ad-supported plan, which really means they get the privilege of paying to see commercials on a tier that doesn't even carry all of Netflix's content.

Most people say they won't change their Netflix plan, but 23% plan to go nuclear: They claim they'll cancel. Only 5% said they intend to change their plan to pay for a moocher. That 23% of quitters could amount to 15.26 million lost subscribers, assuming people go through with it.

Why shouldn't they? Plenty of subscribers walk away from streamers between seasons of their favorite shows, because there are no early cancellation fees. Expect that shoe to drop next. Imagine being told you'll have to keep Netflix for a year or pay $60 or more.

Subscribers also need to be aware that as Netflix loses users and revenue, that might result in fewer shows. There are plenty of popular Netflix shows that people could resubscribe to see, but several won't be around much longer, including The Umbrella Academy, Sex Education, You, and Stranger Things. The ongoing WGA writers' strike could also lead to the death of some shows.

What will moochers do? CordCutting asked them.

Half of responding moochers would stop borrowing passwords—and would stop viewing Netflix altogether. Forty percent plan to keep the mooch alive (or will pay the account holder so they can afford the $7.99 price increase). Only 8% said they'd sign up for their own account.

So that's perhaps 1 million new subs for Netflix versus the possibility of 15 million canceled subs. It's a gamble the company feels it must make to keep a small segment of people (shareholders) happy. And that's a shame.

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