What’s All the
Fuss About...
49Tesla boss Elon Musk said
Netflix’s “woke mind virus”
made its shows “unwatchable”the reason. It’s likely to be similar in
other countries, as a global recession
looms. What’s most worrying for
Netflix is that Amazon Prime Video
and Disney+ don’t seem to be losing
viewers at the same rate.Will a password-sharing
crackdown make much
difference?
It depends how many of those 100
million households cough up for a
subscription (which starts at £6.99 a
month in the UK). Netflix may add
password sharing as a benefit you have to
pay for. It’s already trialling this in Chile,
Costa Rica and Peru, where subscribers
can add up to two extra profiles for $2-$3
(£1.53-£2.30) a month each, on top of
their normal fee. Viewers won’t like
having to pay for something that’s always
been free, but they may prefer it to
Netflix’s other money-making plan.Which is?
Introducing adverts in a new, low-cost
package. It sounds lucrative: big brands
would love to reach Netflix’s 222-million
audience. But the viewers themselves will
no doubt reach for the fast-forward
button on their remotes.What are they?
There’s no mystery here: it’s what you
type to sign into TV-streaming service
Netflix. It’s also what your friends and
family would type if you shared your
password with them. Around 100 million
households globally share their Netflix
passwords, a practice the company has
always tolerated. But it’s now causing a
huge problem.Why?
Because every password shared means a
household that doesn’t need to pay to
watch Netflix. The company now plans
to crack down on password sharing to
help replace all the viewers who have
cancelled their subscription.How many is that?
It lost 200,000 subscribers in the first
three months of the year, which was the
first fall since 2011. Worse, it warned
shareholders that a further two million
were likely to leave between April and
June. Shares fell by 35 per cent following
the news, wiping $54bn off the
company’s value.Didn’t subscriber numbers rise
during lockdown?
Yes, massively. Almost 16 million people
created accounts in the first three months
of 2020, nearly double the figure in the
final months of 2019. It had reached 200
million by the end of the year, up from
167 million 12 months before. It now has
222 million subscribers, with 14 million
in the UK. That still makes Netflix the
world’s biggest streaming service, ahead
of Amazon Prime Video (175m) and
Disney+ (130m).So why are people
leaving now?
There are several factors.
First, it lost 700,000
subscribers overnight in
March when it pulled
out of Russia. It also lost
600,000 in the US and
Canada after raising pricesin January. Some analysts have blamed
the quality of shows on Netflix, saying
they’re uninspired, samey and obsessed
with issues considered to be socially
progressive. Tesla billionaire Elon Musk
(pictured below) slammed the company
as suffering from a “woke mind virus”
that made its shows “unwatchable”.
These all play a part, but there’s a much
simpler explanation.What’s that?
The soaring cost of living. Growth was
always going to slow once lockdown
ended, but rampant inflation has turned
that into an unexpected decline. People
looking to tighten their belts are
cancelling subscriptions across all
services, not just Netflix. Market research
firm Kantar found that 1.5 million UK
households cancelled a
TV-streaming subscription
in the first three months of
2022, up from 1.04m in the
previous quarter (see http://www.
snipca.com/41692). A third of
people gave saving money asNetflix passwords
Sharing is no longer caring for the world’s biggest streaming service
Issue 631 • 11 – 24 May 2022