Many users were buying Netflix’s higher-tiered plans and then sharing their passwords with their friends. This made it a more affordable alternative compared to customers buying their own individual plans, but obviously, this isn’t something the company wants you to do.
In fact, Netflix recently revealed that they would start testing out a paid password sharing feature where users could share accounts, but subaccounts will still need to pay for it although at a lower cost compared to individual plans, and it turns out that this feature if fully implemented could rake in a lot of money for the streaming company.
According to analysts Cowen & Co., they have estimated that if Netflix implemented this paid password-sharing plan worldwide, it has the potential to bring in as much as $1.6 billion annually. However, not all experts share that opinion. Other analysts like Benchmark Co. have suggested that it might have the opposite effect, that it might end up cannibalizing full-ride member growth, and that overall, it might only see Netflix gain a 4% revenue growth. So this could go either way.
We’ll have to wait and see how Netflix’s test with paid password sharing works out and if customers will get on board.
Source and Image Credit Ubergizmo