Netflix is a highly popular and extremely successful streaming website. It has the highest number of viewers than any other Over The Top streaming platform in the market. However, the revenue it was generating was not in compliance with the number of views it was getting. So last month, Netflix announced new password-sharing terms and conditions. Which stats are showing will skyrocket the streaming giant’s revenue in the coming year.
New Netflix password sharing terms will benefit the company
Netflix wants customers who share passwords with persons outside their households. As it goes against the company’s terms of service, to pay a charge to keep viewing.
According to a recent Wall Street report – If the idea is effectively implemented internationally, it could add $1.6 billion to Netflix’s bottom line.
Netflix said last month that it will conduct a password-sharing test in three Latin American countries (Chile, Costa Rica, and Peru).
Customers will be able to add up to two Extra Member accounts to their normal monthly charge for around $2-$3/month each. According to Cowen & Co. analysts, if Netflix rolls out the initiative internationally, it could generate an additional $1.6 billion in yearly revenue or a 4% increase over the company’s projected revenue of $38.8 billion in 2023.
According to the firm’s prediction, almost half of non-paying Netflix password-sharing families will become paying users. Out of which nearly half of those opting to join up for their own personal premium account.
Cowen’s monthly internal poll of 2,500 Americans. Around 10% of the country’s 116 million internet households have someone who watches Netflix but isn’t a paying subscriber.
This new initiative will surely be a huge success for Netflix as it will allow them to fetch new subscribers. Netflix has adopted this new policy in a way to increase their subscribers, which has seen an overall decline, especially in the US. In fact, previously, Netflix used to encourage password sharing actively. And ever since the new term and condition for password sharing has been announced, a tweet by Netflix’s official Twitter handle has been trending.
Love is sharing a password.
— Netflix (@netflix) March 10, 2017
What are your thoughts on Netflix trying to gain subscribers by making users pay additional fees?