Netflix knows that users share their accounts

Netflix loses $135 of revenue every month due to the sharing of passwords. Nearly 10% of the service's 137 million subscribers don't pay.

Streaming services like Hulu, Amazon Prime, and Netflix are missing millions of dollars of revenue due to the sharing of accounts between friends. This is quite common with subscription services and is also an issue that doesn’t have an easy solution.

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These services are meant to be used either on a personal or family level, depending on what tier pricing you pay. The basic plan starts at $9 in the United States and allows up to 1 non-HD stream at a time. The standard tier offers 2 HD streams at a time for $13, while the $16 premium tier offering 4 simultaneous Ultra-HD streams.

Netflix hiked its US pricing at the beginning of this year, so we can expect these prices to stay for at least another year or two. The media research firm Magid told CNBC that 35% of millennials share their passwords for streaming services. Also, 19% of GenX subscribers and 13% of Baby Boomers share their passwords as well.

Magid also reveals that out of Netflix’s 137 million customers, 13.7 million, or 10% of customers, do not pay for their account. That approximates to around $135 million of lost revenue for the streaming service, every month!

Netflix can’t just crack down on sharing passwords, as premium accounts are meant to be shared amongst family members. How can the service differentiate between family and friends? There is no technical solution to this problem, as the decision to share or not depends on the subscriber. It is an issue of morality that Netflix might not be able to solve.

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Netflix Product Chief Greg Peters announced that the company will look into the issue of sharing passwords in the future, during its quarterly earnings call.

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Source: Wreg, CNBC

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