Netflix May Be Losing $192M per Month from Piracy, Cord Cutting Study Claims

Megalith

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New research published by Cordcutting.com suggests Netflix could be losing an estimated $192 million every month and $2.3 billion every year due to subscription mooching (i.e., password sharing), with freeloading users saving $207.74 over a 26-month period at (the previous) base price of $7.99 per month. This is substantially more than Amazon and Hulu, which have lost $45 million per month and $40 million per month, respectively. “Millennials, not surprisingly, account for much of the freeloading.”

There’s an argument that those who pirate would never be paying customers, so these aren’t true losses. It’s the same sort of thing that was said about Napster mp3 downloads back in the day, or about those pirating movies through The Pirate Bay. But there is some portion of the freeloading population that claims they would pay, if they lost access. According to the study, 59.3 percent said they would pay for Netflix (or around 14 million people), contributing at least $112 million in monthly revenue, if they lost access.
 

bbenz33

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But did they take into consideration that those accounts that are sharing would be reduced to lower subscriptions if they couldn't share?
 

bigdogchris

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But did they take into consideration that those accounts that are sharing would be reduced to lower subscriptions if they couldn't share?
If people are splitting the cost, sure.

Another factor is you can't assume a person having a password shared with them would subscribe if they didn't have a "free" account.

Like many businesses, it would be a losing battle for Netflix if they looked at every specific consumer and tried to maximize profit from them. I've worked in some places in the past regarding sales and the owner always wanted to maximize sales to each person when they were in the store. They didn't care about the overall picture or long term retention.

Ultimately Netflix just needs to grow based on a math problem of ROI and cost.
 

Master_shake_

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how can you lose money for something that has been paid for?

what kind of mind fuck is that?

its like sharing your wifi password.

maybe stop making shitty original series or negotiate better terms with content owners.

oh that's too hard blame pirates that's the easy out.
 

RogueTrip

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Anyone else get randomly signed out on netflix. Always thought it was weird that my PS3 and Firestick does that, anti-piracy measure? I can always sign back in but damn annoying.
 
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how can you lose money for something that has been paid for?

what kind of mind fuck is that?


its like sharing your wifi password.

maybe stop making shitty original series or negotiate better terms with content owners.

oh that's too hard blame pirates that's the easy out.
this^
 

ChedWick

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Anyone else get randomly signed out on netflix. Always thought it was weird that my PS3 and Firestick does that, anti-piracy measure? I can always sign back in but damn annoying.
I think theres a limit to the number of apps that can be signed in at one time. Sooo yea, kind of an anti-piracy measure but its not like they are targeting you or anything.
 
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***** in potential subscription where it is assumed that anyone not obtaining entertainment officially through Netflix will now do so ******
 

PeaKr

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I'm suspicious nexflix sponsored this article to justify future rate increases. If netflix wants to make money they need to quit with the partisan movies and shows and stick to making content directed at the majority. They dumped the rating system for a reason, its being hollywoodized.
 

Fifliffl

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I assume they are actually losing some money on this. They do have to pay for server load and bandwidth.
 

jevans64

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I'm suspicious nexflix sponsored this article to justify future rate increases. If netflix wants to make money they need to quit with the partisan movies and shows and stick to making content directed at the majority. They dumped the rating system for a reason, its being hollywoodized.
They just had a large increase in January. Mine went up $2 a month. I think that kind of increase encouraged a lot of folks to start sharing.
 

Derangel

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No they're not. This whole idea that family and friends sharing an account is somehow "piracy" or "losing companies money" is such utter BS. It's very typical Hollywood thinking though.
 

gxp500

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how can you lose money for something that has been paid for?

what kind of mind fuck is that?

its like sharing your wifi password.
Don't give carrier's any ideas, they'll force router manufacturers to limit wifi logins so people will be forced to use their data at a friend's house.
 

arnemetis

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It's pretty much impossible for Netflix to stop this. Can't limit it by ip address, that is dynamic for 99% of people, all that can do is limit the number of simultaneous streams. Can't limit it by some kind of specific device hardware ID, as that can be spoofed (and of course everyone would love having to pay per screen regardless of what you're watching on at the moment.) Maybe every time you open Netflix, you have to enter your personal information and credit card number to ensure its you, no that's a security nightmare and could be stolen anyway.

Ok I got it. Opening netflix requires you to have a monitor embedded in your body to analyze your blood stream for a dna match, while 3 different angles of camera around your approved seating position visually confirm it is only you watching tv, and each camera is a different model and is on its own isp (that you of course pay for.)
 

Oldmodder

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I have relatives that do this password sharing, and i have told them that to me it is embargoing.
And i really dislike ( used a nicer word here ) the excuses people use to explain why the do it, try behaving like that towards me and you and i will not be talking again that's for damn sure.

It is just a Möbius band of cluster frack.
 

Evil Timmy

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Reed Hastings has come out on multiple occasions saying they don't care about people sharing logins, as it's a perfect ad. "Freeloaders" get a taste, but eventually want their own lists and likes, leading to a new signup, friends and family getting in on the account, someone new sees it, and the cycle continues. It's not a problem, it's a business model.
 

Inacurate

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Netflix is not losing out on subscriptions they never would have had, but it's also not cool to share passwords and should be prevented if that's what Netflix wants.

It's pretty much impossible for Netflix to stop this.
Actually, they could start by tying 2FA to your mobile application with a requirement of location.
Which is VERY common in applications, so not a far reach.
Much higher bar to spoof, easy to ID devices.

Streaming Netflix? Click YES. Can only stream if your location matches within a certain distance of the user trying to stream.
Basic framework, just refine as necessary.
 

Grimlaking

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Yea they need to account that we pay extra for extra 'feeds' to stream on simultaneously. Including when we travel and such. It's a dumb move to cut that off. That in and of itself is a major reason why I subscribe.
 

nutzo

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Reed Hastings has come out on multiple occasions saying they don't care about people sharing logins, as it's a perfect ad. "Freeloaders" get a taste, but eventually want their own lists and likes, leading to a new signup, friends and family getting in on the account, someone new sees it, and the cycle continues. It's not a problem, it's a business model.

This.

It's not lost revenue if the person sharing a password would never have paid for it themselves.
 

Master_shake_

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Netflix is not losing out on subscriptions they never would have had, but it's also not cool to share passwords and should be prevented if that's what Netflix wants.



Actually, they could start by tying 2FA to your mobile application with a requirement of location.
Which is VERY common in applications, so not a far reach.
Much higher bar to spoof, easy to ID devices.

Streaming Netflix? Click YES. Can only stream if your location matches within a certain distance of the user trying to stream.
Basic framework, just refine as necessary.
I'm on vacation and want to watch Netflix.

My kids stayed home.

Well can't watch Netflix.
 

masquap

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So I pay for a service for 2 or 4 simultaneous streams but only I can watch all streams at the same time? Wut? Does that mean that me watching Netflix on my phone while on the road while my other half watches it at home is piracy? Is she the pirate, or me?

How about if you charge $x for 2 streams simultaneously and let me, you know, have 2 streams simultaneously, or yo ho ho I go...
 

Submarinesailor

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According to the study, "Nearly 48 percent of people mooching Netflix said they got the login from their parents, while another 14 percent took their credentials from a sibling."
I'd say that's family sharing, not piracy.
 

MMitch

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If they want to alleviate this they could charge 10$/month for 1 stream 4K then charge 4$ on top of it for each additional stream with a maximum number that you could tie other accounts. Like Spotify for family.
I prefer the current format and agree with others.
 

MavericK

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So why do they currently allow you to pay for a higher plan that gives you 4 simultaneous streams? Who do they think is using those additional streams?
 
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Don't count what you have: count what you feel you could've had if the world were a fair place.
 

velusip

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This article is literally insane.

You know what? Let's take it a step further. Account sharing is basically terrorism.
 

Motley

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Meh I stopped my Netflix sub last year because their content completely blows. I'm back on Comcast now.
 

Uvaman2

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I gave my password away to a family member far from me. This person would NEVER buy Netflix, but guess what? Now they talk about it, other people that go by might see it so on. Why would Netflix give a shit if one of the streams is here and the other 400 miles away? They obviously don't, they know what is what, and could probably kill the whole thing if they wanted... But it helps them greatly i would argue, to be the service that is insidious, and spreads like a virus.. if that costs 200 millions a month in potentially missed revenue, so be it... The real question is, how much more revenue does allowing the shared pass brings in. There is a reason why Netflix became so dominant, i assure you pass word sharing is one of them.
 
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while i do not know what their current stance is on this, in the past netflix has stated that they dont really care about password sharing because they do not count the person who is NOT paying as a paid sub that they're loosing. instead they view it as a loss leader 'get em hooked now' and they'll convert to paid later.
 

Revdarian

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I have relatives that do this password sharing, and i have told them that to me it is embargoing.
And i really dislike ( used a nicer word here ) the excuses people use to explain why the do it, try behaving like that towards me and you and i will not be talking again that's for damn sure.

It is just a Möbius band of cluster frack.
Man you really must be old like the nick says to get so bent over family sharing.

The account was paid for with a certain number of streams available for a reason, or do you sit and have 2+ screens by your side so only you can watch all the streams you are paying for, at the same time?


Btw like others have pointed out, Reed Hastings supports family sharing, so you better go on and tell him how wrong he is and how disgusted you are that he allows that on his business.
 

tangoseal

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Instead of corporate greed they should just change their terms to allow family sharing. This will probably bring in more subscriptions.
 
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///AMG

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I have the 4 user Netflix account I got from T-mobile for $3 a month. I share with 6 people in my family, 3 different houses. I paid for netflix a while back but dropped it and wouldn't have resubscribed again, but since T-mobile is subsidizing most of it I said might as well.
 
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