A recent Wall Street Journal article notes that "More than half of young people (54%) said they use a friend’s or family member’s Netflix account, according to a new survey of 6,567 college students released late Thursday by LendEdu, a consumer finance comparison site. "
The article notes that only 34% of users say they have their own Netflix account, while 8% do not have an account as all.
http://www.marketwatch.com/story/most-millennials-dont-want-to-pay-for-netflix-2017-04-07
While reading the article, I honestly was not very surprised by the statistics. The majority of Netflix users who I know share an account, or have multiple profiles on one household account.
But what did surprise me was a featured quote from Reed Hastings, CEO of Netflix: "Netflix chief executive Reed Hasting has said sharers (or, as some people say, cheaters) often go on to become paying customers. “We love people sharing Netflix,” he told the Consumer Electronics Show in Las Vegas last year."
Since Netflix currently does not release subscriber numbers, there is no public data that speaks to how many subscribers the service has. Since Netflix has created one-of-a-kind offerings (i.e. original content only available on Netflix, and its wide library of licensed content) -- it has established itself as a desirable "must-have" these days. Based on Hasting's sentiment, it would seem the company would crack down a little further or disable the ability to have multiple profiles on one account, if it was truly worried about subscriber fees and revenue conversion.
This article made me wonder, what are the reasons that sharers go on to become paying customers, as Hasting claims? Since this study was conducted among college students, one theory I had was that, as undergraduates graduate college and move away from friends, their lifestyles change (i.e. starting new jobs in new cities, beginning graduate programs, getting married and owning their own households, etc.). Perhaps it is this "drifting away" from friends and young adult routines that drive people to get new subscriptions in their new lives. Though I'm sure Netflix will not soon be sharing their own data or theories, I would be interested to see how Hasting backs up his comments.
I am interested to see if our class has any theories, as well. What do you think would cause a Netflix sharer to become a paying subscriber?
I can think of a few reasons why a Netflix subscriber would want to become a paying subscriber. Personally, since I use Netflix so much and love everything that it has to offer, I wanted to give back by getting an account for myself. Though this could be the reason for many others as well, it's not the only one. As people gain financial independence they may want to get their own account. Sometimes people like to have some privacy as to what they are watching, or generally have their Netflix account accustomed to their needs (as Netflix makes recommendation based on what you are watching).
ReplyDeleteIts interesting how Netflix knows this and endorses it. In fact they have gone as far as to set up a feature within their service so that multiple people can use the same account. It requires a log in the they way one logs onto computer desktop and provides each user with a customer dashboard.
ReplyDeleteIt makes me think about the value of data and how it seems to be the currency of the future. Is it more important to generate awareness and collect viewing data of more people to sell to advertisers then the revenue for subscription based accounts? I feel that must be a factor in the leadership at Netflix.
I am one of those people who has admittedly shared multiple accounts with multiple people -- I almost think that it has become a bartering phenomenon of sorts among friends. I've had people ask if I had HBO GO and if so, they were willing to give me access to their Hulu Plus account, etc. It has created almost a sub-culture among cord-cutters which is rather profound to me.
ReplyDeleteThat said, I think that Netflix actually thrives off sharing, and that both Megan and Hugh hit on something when saying that their revenue comes more from data and that lifestyle changes can fuel the desire for an account (ie: you move back home after college and don't see that roomate you lived with as often, so you feel weird sharing their account despite being hooked on House of Cards). All of this reminds me of an old article which I believe may have come out after the conference Megan references above, where Hastings implied that he didn't care if people shared passwords. This caused quite the uproar when it happened:
https://www.cnet.com/news/netflix-is-cool-with-you-sharing-your-account/
Netflix has gone from a subscription model to a data-collection and licensing model, and so long as they don't cannibalize their core business, I think the company has bigger fish to fry than password sharing.
I would be interested in seeing the same sort of survey given to older adults to see their tendency to have their own paid subscriptions to streaming services and whether or not they share their accounts with friends / family members.
ReplyDeleteMy parents recently got rid of their cable subscription and have gotten into streaming using my Netflix and HBO accounts that I pay for. I would be curious to see how many other people in my age group are sharing with their parents.