A few hours ago, it was revealed that Netflix fell short of its paid members forecast by two million accounts, a piece of news that also resulted in its stock price taking a bit of a hit. Although the firm pinned the reason on a "lighter content slate" during the first half of this year due to production woes caused by the global pandemic, we do know that the company is cautious of password-sharing between customers too.
In an investor call (via IGN, Deadline), Netflix CEO Reed Hastings was asked if the company is ready to "turn the screws" on password-sharing. The executive responded with:
We will test many things, but we will never roll something out that feels like turning the screws. It has got to feel like it makes sense to consumers, that they understand.
Similarly, when Netflix COO Greg Peters was asked which countries exhibit most prevalent trends of password-sharing, the executive declined to be specific, and went on to say that the behavior of people is different from country to country. He highlighted that in some cases, password-sharing is not nefarious, but is actually a sign of love and loyalty between people.
Password-sharing is a bit of a tricky topic for Netflix. Citibank analyst Jason Bazinet has previously said that the company could be making $6 billion per year by completely restricting the practice. But considering Peters" comment about password-sharing not being nefarious in many use-cases, such a move could also draw the ire of users, and result in a mass exodus from the platform in the worst case.
That said, Hastings has confirmed that while the company doesn"t know the "right place to land" on the subject yet, it is still exploring what could be the best model for its customers all over the globe. Recently, Netflix began prompting users in certain countries that they should get their account verified via email or text, and that if they don"t live with the account owner, they should get their own account. While the prompt could be skipped in its testing stage, it remains to be seen how Netflix modifies its plans and techniques to limit password-sharing where possible.