No More Free Rides On Netflix?

You know you do it… So many of us do.  Be it a family member in a different household (sisters, mothers, aunts, cousins, 2nd cousins), girlfriend, boyfriend, best friend, friend of a friend, we share our Netflix account logins so that those with various devices can get a um, er– free ride on the account.  Netflix would have to be stupid or willfully ignoring the fact that folks do this, and heck, while I personally admit to nothing, it pains me to see that there’s talk of Netflix cracking down account holders who share their login info with others.

Leave it to a financial analyst at a top firm (Michael Pachter at Wedbush Securities), to alert Reed Hastings to the fact that, once again, he’s leaving diñero on the table.  As Bloomberg News reports,

Netflix is indeed aware that their 33.3 million U.S. subscribers are letting others enjoy B-movies, old TV shows, and original programming for FREE (heaven, have mercy!).

As of now, the Los Gatos, California company has not had tight restrictions to limit the number of a devices that can access an account, though they hope it’s only two devices within the same household.  Nevertheless, that could be about to change, at least according to Pachter at WedBush (who apparently never saw a penny he didn’t pick up off the street).  Pachter thinks Netflix could fly the flag of anti-piracy in cracking down, among other ruses for raking in more dough, but he does seem compassionate enough to mention it might be fair for a parent to let their kid have account access while they’re at college.

Hastings and the big cheeses at Netflix will probably have to really think this one through twice, since the last time they anticipated customer mood and launched a steep price increase they virtually destroyed all the goodwill they’d built up with Joe Consumer over the years.  They’ve only now patched things up by avoiding more price increases while attempting to offer more value with their own brand of exclusive content and original programming.  However, that’s where the real crux of the issue might lie, as Netflix begins to offer premium content on par with some of the top cable nets, like HBO and Showtime (not that they don’t have their own problems with people freeloading via an app for devices using shared account info), they may wish to put their more valuable content behind a more restrictive paywall.

As always, this is the kind of thing driven by Wall Street gamblers looking for new revenue streams within the company.  If that impacts some subscribers and non-subscribers (mostly family members) negatively, so be it… nothing, but nothing can stand in the way of acquiring more dollars at the great American Casino.  Currently, Netflix is considered an underperforming “stock to watch” by analysts on the Street, but they see enough value in Netflix to no longer declare it a walking corpse (ironically, because Netflix increased revenue by raising rates while surviving one of the worst PR tumults in recent corporate history).

One way Netflix might try to restrict access fairly is by offering “family plans” that allow for individual queues, info sharing, and other single account features.  Should Reed Hastings decide to listen to the Street, the cloud of bad PR that has only recently dissipated around the company might return in full force, but still… it might be up to the consumer to finally consider what is really “fair use / sharing,” and what is actually piracy by just another name.

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Christian Hokenson

Christian Hokenson

Christian Hokenson enjoys knife throwing, growing exotic mosses, and that warm spot where the sun shines through the corrugated box. Christian also writes for Gadget Review. You can also find Christian on Google+, and Twitter.

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