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Netflix aims to solve account sharing

Netflix aims to solve account sharing

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SALT LAKE CITY — Consumers openly admit to sharing passwords to avoid paying subscription fees for streaming services, and Netflix is embracing the trend with their new simultaneously-streaming, multi-device plan.

In the company's first quarter earnings letter, Netflix announced Monday its plans to roll out a $12-a-month plan that would double the number of devices allowed to simultaneously stream from two to four. Citing large families as the example, Netflix acknowledged customers run into a wall when trying to stream because of the two-stream limit, but expects less than 1 percent of customers to take advantage of the new plan.

"The core focus is on the immediate family. We don't think there's much going on with sharing password with a marginal acquaintance," said Netflix CFO David Wells during the earnings call.

Business is booming for the company; they announced an additional 3 million subscribers worldwide for the quarter, making their running total 36 million. However, some analysts predict more than 10 million people watch Netflix without paying because of sharing.

So while Netflix may be taking aim at larger families with multiple screens playing at once, others speculate the company is trying to squeeze a few more dollars out of the subscribers that share their accounts too freely. But as Netflix policies stand today, subscribers can use six authorized devices, so adding simultaneously streaming devices might not make much of a difference, said Wedbush Securities analyst Michael Pachter.

If Netflix introduced more limited devices rather than streams, it could cut down account sharing more effectively, Pachter said in an interview with CNET.

"That will kill piracy, which I think is the intent," Pachter said. "I think it's fair if Netflix is being taken advantage of, they should ask for compensation."

In Netflix's current layout, more streamers on one account would mean more cluttered or visible streaming history for the account as a whole. However, in the first quarter letter, Netflix also tossed around the idea of profiles for family members within accounts that would combat that effect. They have tested the feature in many households as a way to household members' individual usage and preferences.

"This enables us to offer more relevant personalized suggestions for each individual, and we expect to roll out profiles globally in the coming months," the letter read.

Photo Credit: Netflix

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Cait Orton


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