If you don’t set a location, Netflix will do it for you. The streamer is clearly aware that this will rub people up the wrong way, and offer an option to add another account member for $7.99 a month to soften the blow.
This can be done since the internet is a two-way network, and everyone gets a different IP address that can be combined with device hardware and software identifiers, data that together with traffic analysis can be sent back to Netflix.
The reason for the login sharing is that after years of piling on hundreds of millions of subscribers and enjoying being in an expanding market with more players entering it, all is not well in video streaming land.
Netflix has something like 231 million subscribers, but is forecasting only moderate subscriber growth this year.
The seemingly obvious way to continue growing is through making more hit series and movies. That’s not easy however in an economy that’s starting to look a bit green around the gills with inflation and rising costs swelling movie makers’ budgets while shrinking how much money subscribers can spend on streaming services.
Continued growth might not be enough even. Disney+ is losing money while facing higher operating costs and it has made thousands of people redundant in response.
In what smacks of desperation, or probably more correctly, shareholder pressure, Netflix has jacked up subscription prices to shore up revenue. Competitor Disney followed suit, making its Disney+, ESPN and Hulu offerings costlier.
That could encourage more people to cancel their subscriptions; perhaps video streaming services were a product of the low inflation and interest rate environment, and are now vulnerable because when times are tough, entertainment spending is the first to be cut.
Could running ads be the way to bump up revenue to cover increasing costs and shrinking profits? Netflix is exploring that option, not yet in New Zealand thank goodness, but in the United States for example you can get a basic plan with ads for US$6.99 a month, which is barebones with HD-only content, no spatial audio and just a single device can be used.
If you find ads insufferable, you can pay US$9.99 a month for an equally barebones basic plan which doesn’t try to sell stuff.
Interestingly enough, US$6.99 is just under $12 at the current exchange rate. For $12.99 we too have a basic plan, which streams content at a comparatively low-res 720p, and no spatial audio. You can watch and download on just a single device for that.
There are no ads on New Zealand Netflix, not yet at least.
Now, technological measures for identifying who’s watching and where content is displayed can usually be defeated, and there are already some “hacks” out there.
They could be outlawed though, since movie studios and entertainment producers are always able to bend authorities’ ears.
Across the Tasman, the Australian Attorney-General’s office has started making noises about including shared logins in its definition of unlawful behaviour.
Banning login sharing is only at the “potentially” stage so far. Judging by examples in the recent past like New Zealand’s anti-file sharing amendment of the Copyright Act, which was watered down but is still the law and still presumes guilt upon accusation, nobody should be surprised if sharing logins becomes a criminal act.
Policing login and account sharing would be relatively easy - see above about streaming services being able to assign unique identifiers to devices and subscribers. It will definitely not be welcomed by subscribers, however.
This does feel like a blast from the past, a return to restrictive content access policies which encouraged file sharing or piracy if you like. Hauling people in front of the Copyright Tribunal wasn’t what ended piracy; easier and more timely access to great content did that. Going back on the latter seems a very retrograde step.
