Netflix password crackdown is ‘doomed to fail’

One of Netflix’s two big moves to halt its decline is doomed to failure, especially in Australia.

One hundred million Netflix subscribers are watching with great interest a little experiment the streaming company is carrying out in Peru, Chile and Costa Rica.

These are the three territories in which Netflix is ​​testing a crackdown on password sharing, and so far it’s confusing its customers. The trial is testing a feature where existing customers are asked to pay extra (about $3 billion) to share their password beyond their household.

Tech publication Rest of World spoke to a dozen customers in Peru this week and found a hodgepodge of messaging and app approaches.

Rest of the World reported that users said they felt the definition of a household was unclear and that some members had received messages asking them to pay extra to share their password, while others others had not.

Some users said they canceled their accounts after being confronted with the policy change, while others were able to “ignore” the message and carry on as they were.

Password sharing is a common practice among streaming users. It works by a subscriber sharing their login and password information with someone outside of their residence so that the other household can also access Netflix’s (or other streaming service) platform while by paying only one fee.

It’s so common that Netflix revealed in April that 100 million of their 222 million paid accounts engage in the practice, which is a violation of terms and conditions.

Anecdotally, the public often exchanges passwords with friends and family. So you could pay for Netflix and your brother who lives in another residence pays for Disney and you trade access to each other’s accounts.

As long as Netflix is ​​streaming, there has been password sharing.

Netflix said it never bothered to do anything about it when growing so aggressively, but now that its membership is shrinking, the company sees a crackdown as an opportunity to recoup lost revenue .

The experience in Peru so far suggests that Netflix will have a hard time convincing its customers to pay extra for what they are already enjoying “for free”.

While it is reasonable for Netflix to enforce its own policy, it has done itself a huge disservice by waiting this long to finally implement the measures.

The behavior runs so deep that Netflix risks vilifying its customers by telling them they’re wrong (even if they are) and demanding that they pay to rectify the situation, especially during a global economic downturn and pressure on household budgets.

Even if it’s $3 more per month, it’s not the amount but the taxation that will bite.

Australians, in particular, are reluctant when it comes to paying for programming. In the days before streaming, take-up of pay-TV never exceeded 30%, compared to significantly higher market penetration in comparable markets such as the US and UK.

Moreover, years of local audiences being held hostage to the whims of broadcast network programming, months of waiting for shows and episodes that have already aired overseas, have spawned a vicious culture of piracy that Australians don’t have never completely given up.

Australians have become voracious consumers of pirated content, ranking among the worst copyright thieves in the world.

It was fueled by a culture that deliberately compartmentalized the right of pirates to whatever they wanted to watch whenever they wanted from the exorbitant cost of producing ambitious TV shows and movies.

They didn’t care if they were wrong or if it was illegal – they felt indebted, not indebted to the filmmakers and producers.

It wasn’t until Netflix launched locally in 2015 that the idea of ​​paying for TV shows became normalized and piracy rates were reduced, but that earlier sense of entitlement never went away.

Netflix has focused more on its originals such as stranger things, ozark and Heart stroke because he saw that he would lose his licensed titles to the studios that owned them, and the market fractured.

Today, there are nearly 20 paid streaming services in Australia, each with their own must-watch exclusive titles, and resentment is growing among consumers who are seeing their streaming bills skyrocket – the first expectations of $10 per month for “everything”.

A government survey found that in 2020, 34% of Australians watched pirated content.

All of this context makes it very difficult for Netflix to impose a password crackdown in Australia where the bitterness of those hacking days still hangs like an acrid cloud, now directed at the rising cost of accessing multiple services.

If Netflix decides to go after its customers for sharing their passwords – as it can under its terms and conditions – it loses everything it has left, rightly or wrongly.

There are enough people who moodily terminate their subscriptions under cover of protest, even though in reality they are looking for a justification to steal access to TV and movies.

By leaving it that long, Netflix’s crackdown is doomed.

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