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Should Netflix crack down on account sharing?

post #1 of 23
Thread Starter 
Stories have been coming out since Netflix posted their first quarter earnings - basically 'how to squeeze blood from a turnip'.

http://consumerist.com/2013/04/22/should-netflix-crack-down-on-account-sharing-freeloaders/

Along with this comes a new streaming plan from Netflix.

http://www.macrumors.com/2013/04/22/netflix-launches-family-plan-4-simultaneous-streams-for-12month/
post #2 of 23
It'll be difficult for them to do that while allowing one family member to use Netflix while travelling on business while the remaining family use it at home. Placing severe limits on the number of device which can be registered to an account will lose them a ton of customers.
post #3 of 23
I agree. It is the flexibility of using many devices and other features that made Netflix popular. Clamping those features down might be the equivalent of cutting down the branch you are sitting on.
post #4 of 23
Quote:
Originally Posted by michaeltscott View Post

It'll be difficult for them to do that while allowing one family member to use Netflix while travelling on business while the remaining family use it at home. Placing severe limits on the number of device which can be registered to an account will lose them a ton of customers.

And where would those customers go? Amazon streaming? I did the free trial for Amazon streaming, and I did not like it. The image quality was not as good as Netflix.
post #5 of 23
Quote:
Originally Posted by Jim McC View Post

And where would those customers go? Amazon streaming? I did the free trial for Amazon streaming, and I did not like it. The image quality was not as good as Netflix.

I'd disagree; Netflix image quality at its best might be superior, but it's not that much superior for most things and I doubt that most of Netflix's customers would give a damn about the difference. In the month or two before the final season of Fringe aired I watched all 4 previous seasons in HD as Amazon Prime Instant Video on my Roku. Both PQ and AQ (DD 5.1) were quite decent.

I'm not sure where the lost customers would go for streaming video but the assumption that Netflix can screw everyone over at will because they're the best source of streaming video around is a fallacy. If they were to attack account sharing through a low maximum registered device limit, how low would the limit have to be? I think that five or more wouldn't affect the problem and lower than that would piss many people off. VUDU has a limit of 5 and it annoys me from time to time when I want to watch on a device and have to go through the currently registered ones and toss one.
post #6 of 23
Does Amazon even stream in 1080p? It looked to me, on my 106" diagonal screen, that Amazon was 720p, while Netflix streams in 1080p. I agree that most people wouldn't notice any difference with an average size TV.
post #7 of 23
Quote:
Originally Posted by Jim McC View Post

Does Amazon even stream in 1080p? It looked to me, on my 106" diagonal screen, that Amazon was 720p, while Netflix streams in 1080p. I agree that most people wouldn't notice any difference with an average size TV.

No they don't stream 1080p. I can see where it'd make a big difference on your 106" screen; it makes a difference to me on my 46" screen, viewed from 6-8 feet away. But Amazon's 720p is certainly watchable for me. Sometimes it'll have an otherwise superior presentation, when Netflix also has the same title: DD 5.1 sound when Netflix is stereo and/or HD when Netflix is SD and/or OAR when Netflix is zoomed and cropped to 1.78:1.
post #8 of 23
What does the amount of devices you have registered with Netflix have anything to do with limitations on streaming? I have at least eight, but I can only use two at a time. Since it's only me and my wife and I don't plan to share my account with anyone else, at eight bucks a month, it works out just fine.



Ian
post #9 of 23
Limiting the number of registered devices reduces the likelihood that you'll be willing to spare one to in order to share your account with friends and relations.
post #10 of 23
Quote:
Originally Posted by michaeltscott View Post

I'd disagree; Netflix image quality at its best might be superior, but it's not that much superior for most things and I doubt that most of Netflix's customers would give a damn about the difference. In the month or two before the final season of Fringe aired I watched all 4 previous seasons in HD as Amazon Prime Instant Video on my Roku. Both PQ and AQ (DD 5.1) were quite decent.

I'm not sure where the lost customers would go for streaming video but the assumption that Netflix can screw everyone over at will because they're the best source of streaming video around is a fallacy. If they were to attack account sharing through a low maximum registered device limit, how low would the limit have to be? I think that five or more wouldn't affect the problem and lower than that would piss many people off. VUDU has a limit of 5 and it annoys me from time to time when I want to watch on a device and have to go through the currently registered ones and toss one.

For low bandwidth customers Netflix beats all others hands down, and you have a better chance of getting HD quality than Amazon by far.

So, protecting investment and the longevity of their business plan is now considered screwing everyone over? If it keeps Netflix profitable by clamping down on liberal sharing of individual accounts, I say screw away. So you get annoyed from time to time, big deal. It beats no Netflix at all. I will support them and adjust my processes and workarounds accordingly regardless of the method they use.
post #11 of 23
I don't think they will want to limit the number of devices that can be registered, as they depend on those very devices to keep a foothold in the market.

If they feel compelled to limit sharing, the best approach to me would be to only allow streaming to two different IP addresses at any given time. Allow unlimited devices on one of them while only one device on the other at any given time. This would only cause issues with a situation where you have two people traveling or away from home, trying someone at home is trying to use it as well.

Such an approach would not impact most users. I would not eliminate the ability to share but it would limit it.
post #12 of 23
Quote:
Originally Posted by Nethawk View Post

For low bandwidth customers Netflix beats all others hands down, and you have a better chance of getting HD quality than Amazon by far.

I believe that Amazon's 720p is actually lower bit rate than Netflix's 720p (maybe even a little less than the lower 2350 Kbps Netflix 720p video encode).
post #13 of 23
Quote:
Originally Posted by DanPackMan View Post

Allow unlimited devices on one of them while only one device on the other at any given time.

I can't see how they'd arrange that. Most ISPs use modems that dynamically grab an address via DHCP; most of the time these address stay the same but are subject to possible change (I've seen mine change from time to time). Perhaps they could use address domain instead of a particular full address. You could still share with one person and possibly multiple ones if they have the same ISP, but it does narrow down the possibilities.
post #14 of 23
I certainly hope they don't limit the number of devices. That would be a PITA. It already is with VUDU with their five device limit and I have to constantly play musical VUDU players. I have no less than twenty devices with Netflix playback.
post #15 of 23
Quote:
Originally Posted by michaeltscott View Post

No they don't stream 1080p. I can see where it'd make a big difference on your 106" screen; it makes a difference to me on my 46" screen, viewed from 6-8 feet away.

That's what I thought. Why doesn't Amazon stream in 1080p?
post #16 of 23
Quote:
Originally Posted by Jim McC View Post

That's what I thought. Why doesn't Amazon stream in 1080p?

Who knows? I have heard (from aaronwt, I believe) that if you download HD titles to TiVo that they're in 1080p, so they have the encodes. (Download them to PCs and they're 720p or at least TV episodes are). Of course, they might not create 1080 encodes formatted for streaming.
post #17 of 23
Quote:
Originally Posted by aaronwt View Post

I certainly hope they don't limit the number of devices. That would be a PITA. It already is with VUDU with their five device limit and I have to constantly play musical VUDU players. I have no less than twenty devices with Netflix playback.


No less then 20 devices? eek.gif I think it's time for an intervention! You need to join HD addicts anonymous.



Ian biggrin.gif
post #18 of 23
Netflix has officially pooh-poohed the idea that account sharing is a problem. From the Q1 2013 Netflix, Inc. Earnings Conference Call Q&A Transcript, from the 22nd of this month (near the top of page 4):

Quote:
Erin Kasenchak - Netflix Inc - Director of IR

How do you think about shared accounts? It grows your brand yet it is revenue lost. How do you think about the need or importance of cracking down on shared accounts?
_____________________________________________________

Reed Hastings - Netflix Inc - CEO

It depends on what you mean by shared accounts. We usually like to think that a husband and wife can share an account and that that's perfectly appropriate and acceptable. If you mean, hey, I got my password from my boyfriend's uncle then that's not what we would consider appropriate. And so, we focus on serving the immediate family. We've got -- our standard plan has two simultaneous streams.

And, that serves the vast majority of families around the world quite well. There's a few times when the family is large that's two streams doesn't work and so we're now offering, or will be offering shortly, a four stream option for about a 50% uplift. But, again, as we said, we expect a fewer than 1% of our members to take that plan. So, the core focus is on the immediate family. And, we really don't think that there's much going on of the I'm going to share my password with a marginal acquaintance.

(Emphasis added). Either their estimates differ from Wedbush Securities' estimate of 10 million non-paying users or they don't think that 10 million is "much going on" biggrin.gif. I suppose that your sister or best bud living in other cities aren't "marginal acquaintances".

The financial analysts worry that Netflix's current price for streaming plans loses viability as they continue to grow and increase their reliance on streaming income. They see a crackdown on sharing as one possible way to avoid raising prices. If the analysts are right and all 10 million of the "freeloaders" opened accounts it'd be an additional 960M gross per annum--obviously all of them wouldn't open accounts but it's definitely worth going after a piece of that, if it can be done without unduly antagonizing existing subs.
post #19 of 23
Quote:
Originally Posted by michaeltscott View Post

I can't see how they'd arrange that. Most ISPs use modems that dynamically grab an address via DHCP; most of the time these address stay the same but are subject to possible change (I've seen mine change from time to time). Perhaps they could use address domain instead of a particular full address. You could still share with one person and possibly multiple ones if they have the same ISP, but it does narrow down the possibilities.

It wouldn't matter what the IP addreses are or if they changed. It would simply only allow up to two individual addresses to connect at any given time.

Sounds like it all a moot point now anyhow.
post #20 of 23
Quote:
Originally Posted by DanPackMan View Post

It wouldn't matter what the IP addreses are or if they changed. It would simply only allow up to two individual addresses to connect at any given time.

Which would only let you share with one friend or family member. I suspect that most people who are doing this are only sharing with a single person outside of their household.

Like you said, it's currently moot, since Netflix doesn't perceive it as being a problem.
post #21 of 23
Quote:
Originally Posted by michaeltscott View Post

Which would only let you share with one friend or family member. I suspect that most people who are doing this are only sharing with a single person outside of their household.

Like you said, it's currently moot, since Netflix doesn't perceive it as being a problem.

Yes, that would be the case.... but the benefit as I originally proposed is that it would allow you to have as many devices as you wanted streaming as long as they were connected through one of those two IP addresses in use. So for a household you could have two or three streams going, plus someone "on the road" could have one as well. Since they only allow two streams total right now, I view it as a possible path forward that would benefit the subscriber while still limiting the number of folks you could practically share with.

But alas, they probably are not reading this thread.......
post #22 of 23
According to my account I've been on the streaming plan that allows four devices for a week or two now. Although it shows the same price for the four device streaming plan as it does for the two device streaming plan, $7.99.


EDIT: I just noticed today they eliminated the option for the stupid 2 hours a month streaming plan that was $4.99.
post #23 of 23
I don't use more than one user until they offer separate profiles.
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