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Netflix really messed this up. They shouldn't have tried to tackle password sharing. Instead they should have enforced concurrent streams and let people pay fo

by pier25 4y ago

Netflix really messed this up. They shouldn't have tried to tackle password sharing. Instead they should have enforced concurrent streams and let people pay for more concurrent streams. Psychologically it's very different and people paying for the premium plan of 4 streams would probably not be affected.

alexfromapex 4y ago
I feel like lots of companies make this mistake of not valuing the customers over shareholders. This is a fatal mistake.
- BLO716 4y ago
  Well, the Netflix content is not going to get any less palatable because their business model works.
waboremo 4y ago
Exactly! But that's just how it goes. Once leadership identifies a problem, it takes a lot to dissuade them. They saw password sharing as a fixable problem, an area of loss revenue that they had to do something about to counter the metrics of stagnating subscriber growth. Very little would change that, even though your approach would prove to be quite beneficial
- willis936 4y ago
  They envision the back pats they'll give themselves for the success of their great idea, but not the fallout of their terrible idea. Sycophants should never be given authority.
- smcl 4y ago
  I wonder if those responsible will take this as a lesson learned, or will brush it off as “well they wouldn’t have paid anyway”
  - scotty79 4y ago
    The problem they have now is not that people who didn't pay wouldn't pay. They are now losing people who actually paid.
- BLO716 4y ago
  Spot on, my boy. A lot of folks see this as a consumable like music and should be a free commodity. I akin this to free music for download and the death of an industry. A NEW industry popped up and gave us streaming music and there was no longer a need to OWN music. Artists were also given tools to expand their music on every platform w/ very little investment. The shared resource thing, is just Netflix turning a blind eye, because their business model worked for a time and allowed this to happen. Now that DVDs are all but dead, this was the next logical business revenue model that needed a revamp. How can anyone blame Netflix for FIXING a loss leader in their business line(s)? We all run and work for start-ups .. its the natural progression of finances at scale.
- mcguire 4y ago
  I once heard a story about Microsoft: a research group had discovered that they could control the radio-frequency emissions of computers with code, and could broadcast the license serial number of running software. Unfortunately, the signal was too weak to detect unless a large number of computers were broadcasting the same license number. But you could easily discover companies that were illegally sharing licenses by driving a radio equipped van around the business district. (I probably have most of the details wrong; it's been years.) Anyway, the punchline was that Microsoft wasn't interested because it wouldn't catch all illegal licenses.
rrrrrrrrrrrryan 4y ago
Netflix has been enforcing concurrent streams for a while now, no? Four adults that live in four different houses sharing one Netflix account might not ever bump up against the four concurrent stream limit. Their concurrent usage might be quite similar to a family of four under one roof. But critically, the four adults are all technically capable of paying for their own subscriptions, while the children of the family of four are not. Netflix is expecting to lose some (or most) of the people who are sharing passwords, but if some nonzero portion of them end up coughing up money for their own subscription, the effort is worthwhile.
- jstarfish 4y ago
  > Four adults that live in four different houses sharing one Netflix account might not ever bump up against the four concurrent stream limit. Their concurrent usage might be quite similar to a family of four under one roof. Realistically, the case to allow password sharing is four family members, living under the same roof, but not sharing the same internet connection. If the family is watching Netflix on their own phones over cellular (respectively: on train, out walking, at work, at school), you can't impose password-sharing restrictions on the account without fucking more than one of them over.
  - josho 4y ago
    Those users won’t be affected by password sharing restrictions. The implementation details take into consideration those scenarios.
- PragmaticPulp 4y ago
  > Netflix has been enforcing concurrent streams for a while now, no? Yes. They've been doing more or less what the parent comment suggested for a very long time.
  - lazyasciiart 4y ago
    I think the parent comment was suggesting that they allow more concurrent streams for additional money. ie: $4/month per additional concurrent user, now you have 10 friends on it for $56/month.
manuelabeledo 4y ago
I'm sure this move is partially because of copyright holders. Bet that they get their cut per stream and account. My hypothesis is that Netflix knows that account sharing is a net positive, as it cannot be curbed without losing a significant amount of subscribers, and many people aren't willing to pay $10 per account.
londons_explore 4y ago
I think the UX of a stream limit matters... If, for example, when you click "play", some other user on your account gets kicked off with an error about hitting the stream limit, then you will forever be worried about hitting that limit and inconveniencing family - so you may upgrade sooner. Being kicked out mid show and unable to continue until you click to upgrade is going to lead to lots of people upgrading in frustration.
usefulcat 4y ago
Did they? This should certainly reduce their expenses related to their streaming infrastructure. And if most of the affected people weren't paying anyway, it will have little or no effect on their revenue. It will result in less word of mouth, and possibly a bit of negative press. If subscriptions don't go up afterwards and streaming infrastructure costs are a sufficiently small portion of their total expenses, then I could see it being a net negative. In any case, their biggest problem is that their content has become so mediocre, but this action won't have any effect on that.
- fundad 4y ago
  Yes this sounds like 1M potential customers for the ad-supported tier which makes more than a paying paid customer for now.
londons_explore 4y ago
They could have done smart things like telling you have hit the stream limit at a key moment in a show - perhaps 10 mins from the end. When you really don't want to just say 'nah, I'll watch the rest another day when I'm not at the stream limit'.
BLO716 4y ago
Some folks run businesses that succeed, other ran (past tense) start-ups that failed. Unfortunately, the lasting affect will be a net positive, because sometimes you have to just be the adult and say loosing money isn't an option. I would like to call this shedding the college weight, and firing 80% of the work force, because the business will die otherwise in the case of Twitter. Would you rather run a business with much higher ROI with a small user base and run a lean business, or a fat business with super scale data but bleeding out money? I'm not sure I get the argument against this.
- manmal 4y ago
  There’s an element of critical mass involved - a streaming platform can only afford to create so much of their own content if they have the revenue to back up those costs. Less users means less revenue means less content, and at some point things might break down.
squeaky-clean 4y ago
This is already a thing. I pay for the 4-viewer plan for my family of 3, because when we were on the 2-viewer plan we would frequently get denied access to streaming because the other 2 were already watching something.
1letterunixname 4y ago
They should rename themselves to Qwikster.

by pier25 4y ago

alexfromapex 4y ago

I feel like lots of companies make this mistake of not valuing the customers over shareholders. This is a fatal mistake.

BLO716 4y ago
Well, the Netflix content is not going to get any less palatable because their business model works.

waboremo 4y ago

Exactly! But that's just how it goes. Once leadership identifies a problem, it takes a lot to dissuade them. They saw password sharing as a fixable problem, an area of loss revenue that they had to do something about to counter the metrics of stagnating subscriber growth. Very little would change that, even though your approach would prove to be quite beneficial

willis936 4y ago
They envision the back pats they'll give themselves for the success of their great idea, but not the fallout of their terrible idea. Sycophants should never be given authority.
smcl 4y ago
I wonder if those responsible will take this as a lesson learned, or will brush it off as “well they wouldn’t have paid anyway”
- scotty79 4y ago
  The problem they have now is not that people who didn't pay wouldn't pay. They are now losing people who actually paid.
BLO716 4y ago
Spot on, my boy. A lot of folks see this as a consumable like music and should be a free commodity. I akin this to free music for download and the death of an industry. A NEW industry popped up and gave us streaming music and there was no longer a need to OWN music. Artists were also given tools to expand their music on every platform w/ very little investment. The shared resource thing, is just Netflix turning a blind eye, because their business model worked for a time and allowed this to happen. Now that DVDs are all but dead, this was the next logical business revenue model that needed a revamp. How can anyone blame Netflix for FIXING a loss leader in their business line(s)? We all run and work for start-ups .. its the natural progression of finances at scale.
mcguire 4y ago
I once heard a story about Microsoft: a research group had discovered that they could control the radio-frequency emissions of computers with code, and could broadcast the license serial number of running software. Unfortunately, the signal was too weak to detect unless a large number of computers were broadcasting the same license number. But you could easily discover companies that were illegally sharing licenses by driving a radio equipped van around the business district. (I probably have most of the details wrong; it's been years.) Anyway, the punchline was that Microsoft wasn't interested because it wouldn't catch all illegal licenses.

rrrrrrrrrrrryan 4y ago

Netflix has been enforcing concurrent streams for a while now, no? Four adults that live in four different houses sharing one Netflix account might not ever bump up against the four concurrent stream limit. Their concurrent usage might be quite similar to a family of four under one roof. But critically, the four adults are all technically capable of paying for their own subscriptions, while the children of the family of four are not. Netflix is expecting to lose some (or most) of the people who are sharing passwords, but if some nonzero portion of them end up coughing up money for their own subscription, the effort is worthwhile.

jstarfish 4y ago
> Four adults that live in four different houses sharing one Netflix account might not ever bump up against the four concurrent stream limit. Their concurrent usage might be quite similar to a family of four under one roof. Realistically, the case to allow password sharing is four family members, living under the same roof, but not sharing the same internet connection. If the family is watching Netflix on their own phones over cellular (respectively: on train, out walking, at work, at school), you can't impose password-sharing restrictions on the account without fucking more than one of them over.
- josho 4y ago
  Those users won’t be affected by password sharing restrictions. The implementation details take into consideration those scenarios.
PragmaticPulp 4y ago
> Netflix has been enforcing concurrent streams for a while now, no? Yes. They've been doing more or less what the parent comment suggested for a very long time.
- lazyasciiart 4y ago
  I think the parent comment was suggesting that they allow more concurrent streams for additional money. ie: $4/month per additional concurrent user, now you have 10 friends on it for $56/month.

manuelabeledo 4y ago

I'm sure this move is partially because of copyright holders. Bet that they get their cut per stream and account. My hypothesis is that Netflix knows that account sharing is a net positive, as it cannot be curbed without losing a significant amount of subscribers, and many people aren't willing to pay $10 per account.

londons_explore 4y ago

I think the UX of a stream limit matters... If, for example, when you click "play", some other user on your account gets kicked off with an error about hitting the stream limit, then you will forever be worried about hitting that limit and inconveniencing family - so you may upgrade sooner. Being kicked out mid show and unable to continue until you click to upgrade is going to lead to lots of people upgrading in frustration.

usefulcat 4y ago

Did they? This should certainly reduce their expenses related to their streaming infrastructure. And if most of the affected people weren't paying anyway, it will have little or no effect on their revenue. It will result in less word of mouth, and possibly a bit of negative press. If subscriptions don't go up afterwards and streaming infrastructure costs are a sufficiently small portion of their total expenses, then I could see it being a net negative. In any case, their biggest problem is that their content has become so mediocre, but this action won't have any effect on that.

fundad 4y ago
Yes this sounds like 1M potential customers for the ad-supported tier which makes more than a paying paid customer for now.

londons_explore 4y ago

They could have done smart things like telling you have hit the stream limit at a key moment in a show - perhaps 10 mins from the end. When you really don't want to just say 'nah, I'll watch the rest another day when I'm not at the stream limit'.

BLO716 4y ago

Some folks run businesses that succeed, other ran (past tense) start-ups that failed. Unfortunately, the lasting affect will be a net positive, because sometimes you have to just be the adult and say loosing money isn't an option. I would like to call this shedding the college weight, and firing 80% of the work force, because the business will die otherwise in the case of Twitter. Would you rather run a business with much higher ROI with a small user base and run a lean business, or a fat business with super scale data but bleeding out money? I'm not sure I get the argument against this.

manmal 4y ago
There’s an element of critical mass involved - a streaming platform can only afford to create so much of their own content if they have the revenue to back up those costs. Less users means less revenue means less content, and at some point things might break down.

squeaky-clean 4y ago

This is already a thing. I pay for the 4-viewer plan for my family of 3, because when we were on the 2-viewer plan we would frequently get denied access to streaming because the other 2 were already watching something.

1letterunixname 4y ago

They should rename themselves to Qwikster.