Originally published at: Netflix would like you to get your own account | Boing Boing
Originally published at: Netflix would like you to get your own account | Boing Boing
I do not have a problem with this as Netflix provides a lot of great content at a reasonable price, but one thing I am curious about is if anyone has tracked Netflix’ rate increases over the years and compared them to those of cable/satellite TV providers?
I don’t even know how Netflix turns a profit while making such FX heavy shows like Altered Carbon or Lost In Space. Of course they also like to kill shows after a poor season so that’s the down side.
Frankly I don’t have an issue with Netflix cracking down. I think they should have done it a decade ago.
It’s not about the subscriber dollars, of course. It’s not even about anti-piracy. It’s about data.
When five people in different households use the same account, it’s harder for Netflix to track who likes what. It’s the same reason why stores don’t like people sharing rewards cards. The more you’re anonymized, the less marketable you are.
When Jane’s account is also shared with Jess, Ryan, Scott and Marie, who is the sci-fi fan, who likes rom-coms, who’s into anime… Netflix can’t tell, so that data is less valuable.
The cost of subscription is low, because that’s not what pays the bills. Even if Jess, Ryan, Scott and Marie pay for access, as long as they each all use the others accounts (or all use Jane’s and never their own) Netflix would fight it. The emails reminding me to log in or watch don’t increase my odds of keeping a subscription… if all they cared about was my payment, they’d ignore me and let me keep paying automatically for a service I don’t use. They wouldn’t risk reminding me how rarely I use it (which may prompt cancelation) unless there was something more important at stake. That something, of course, being my viewing habits.
The only concern Netflix has with IP theft is if you steal it, they can’t track you.
But isn’t that why each account allows for the creation of multiple profiles? Sure, it’s only 5, but they are incredibly useful in making sure that your preferred content is made more visible upon login. With the maximum number of simultaneously running screens being 3 on a basic account level, I always thought all this was fairly leveled out. Netflix still gets its individual user data, etc.
And how often does the profile thing actually work? Most folks aren’t even going to bother to set up multiples. Families might so little Tessa and Mark can’t access the R-rated stuff, but most people who share are just going to use the default profile.
Trust me, your $11 per month (or whatever) isn’t covering it. But getting you to pay for the opportunity to be sold?
And I say this as a Netflix subscriber. But I know where they really make their money and it’s not from my credit card.
It’s the same business model as the Robinhood stock-trading app with its no-fee trades or Facebook for that matter. Data about the users/products is a lot more valuable to the company and its real customers than the subscription fee.
The fee is an interesting mechanism, though. It’s not needed by the company (appreciated as hard revenue, certainly, but not core to the model) but it does assign value to the service in the mind of the consumer. In that process it makes it seem like a competitor to traditional cable TV (sclerotic companies that never got on the big data bandwagon).
Until they kill off the cable TV model (more a matter of securing sports and live event broadcast rights) the major streaming services as a group will try to keep their combined fees hovering around or just below the cost of a fully-loaded cable package.
If anything, Netflix is going to make a push to get more people to use the profiles on one account. Audience segmentation by the individuals within a household is a holy grail for this business model.
Really hard to say. The non-tech people I know love the idea of creating their own profile, as it becomes their own space on the service. But I admit in my household profiles are used because, yes, I have kids and I don’t want to my homepage cluttered with the things they watch.
Interesting. I thought that’s what people did. Someone I know, but certainly definitely not me (for sure not) has five profiles in their account: One is used by the adults in the main household, 3 by semi-adult children living elsewhere who don’t have the means to afford it themselves, and one profile used by mooching in-laws in another state and about whom it’s not worth the drama to stop it. The only serious rule is “use your own profile, don’t mess with anyone else’s.” (That rule came into effect when someone, who shall remain nameless, went into the in-laws profile and passively-aggressively filled the “recently viewed” with soft-core-and-harder sex shows).
ETA: No, I do not live in Hurstbourne Tarrant, Hamps, England. Far too posh for me.
This makes me feel old. How has Netflix been around this long?
Founded in 1997. Of course back then it was in the DVD-shipping business as there’s no way streaming would have worked with the tech of the time, but yeah… it’s pretty old.
For Netflix, specifically, that’s actually not true – your $11/month is 99% of their revenue.
The thing with large data sets is, they don’t actually generate a lot of money. You can sell address lists to telemarketers etc., but that’s peanuts in Wall Street terms; and if you’re Google or Facebook, you can make a lot of money selling ads, but there’s a strong argument that those companies are good at selling ads because they’re monopolies, not because big data makes their advertising better.
Everyone still assumes that if you harvest a ton of data, that is somehow valuable in itself. But the only way this is actually true is that if you collect lots of data, you can get investors to give you billions of dollars, because they believe it will become valuable somehow. Notoriously, lots of startups do get their income from continuous investment rather than revenue (i.e., are Ponzi schemes), but in general you cannot run a real, sustainable business on harvesting data because it doesn’t make money. (Robinhood is a rare exception, because their trading data is something hedge funds can directly turn into cash).
As far as I can tell, Netflix really does make a ton of money on subscriptions, and that’s what funds their shows. The reason they’re lax about password sharing, for now, is the same reason Microsoft is happy to let people pirate Windows –it’s effective marketing, and the people who are getting it for free are likely to be the toughest sells anyway.
(I’d also add, I doubt Netflix has any problem distinguishing me from the other people who use my Netflix account, at least for stats purposes)
But Netflix still very, very, very much wants that sweet, sweet data.
They famously make a ton of their creative and programming decisions based on a series of internal algorithms crunching numbers from the platform and other data services.
It’s why seemingly successful shows get cancelled spontaneously. Critical darlings don’t get a chance to catch on. And why so much of their original content is just generic bulk. Every decision is apparently driven by the data, shows are target at really specific categories and niches.
It’s quite possible the test is the thing, though. If it spooks enough lawful-nervous aligned people into creating their own accounts without alienating the rest of the chart, then that could be a pure win for them.
All Netflix cares about is that each household has its own main account, and not because of revenue loss concerns. At the moment (and probably going into the future) they won’t charge per profile, either – the profile delivers more long-term value on it’s own.
I also doubt that Netflix is particularly locked into the idea of a geographic constraint on what a household is beyond primary zip code (which delivers the streaming service a whole raft of associated demographic and psychographic data it can attach to the profile’s viewing habits).
Funny that this all comes up now. My elderly mother just got her first broadband internet installed and I was planning to let her use my Netflix password to watch Schitt’s Creek and a few docs she’d been getting from the library til now.
But if Netflix shuts down this sort of thing, I won’t be able to introduce her to streaming services (you wouldn’t believe how much I had to twist her arm to upgrade from <1mbps DSL at the same price), so Netflix loses that opportunity to gain another subscriber, along with probably every other streaming service.
I have a second profile for a friend of mine who I used to live with. My wife has a second profile for her sisters who she used to live with.
Yeah, Netflix has over 200 million subscribers. That’s a lot of $11/mo and is plenty to fund their infrastructure and shows. They at least claim not to sell user data and they clearly don’t sell ads.