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Netflix is indicating that its account-sharing crackdown will expand and target its remaining freeloaders over the next two quarters.
Netflix co-CEO Greg Peters was asked during a Wednesday earnings call about the company’s progress in completing the crackdown, which began in the US in Q2. "So, we're going to continue the rollout for the next couple of quarters. And I think folks are trying to figure out how much juice is left there,” Peters said.
So far, the company has refrained from instituting a full crackdown to avoid alienating viewers. “We've always thought that making this change should be done in a steady, considered way. And so, our plan has been to stage out this rollout,” Peters added. “And as a result, I think as you're alluding to, there are a number of borrower cohorts, which has, as of today, have not received part of that experience.”
The goal has been to carefully nudge account-sharers into paying for the service, for instance, through an official Netflix subscription option called paid sharing. But it now looks like the streaming giant is close to bringing down the hammer on all remaining account borrowers, whether they pay or not.
“There's a set of borrowers that we're not going to convert. We haven't converted yet. We're not going to convert over the next couple of quarters,” Peters said. “But that really represents how we think about paid sharing going forward, which is it’s now become part of just our standard way of operating.”
When this was first announced, some Netflix users said they'd cancel their subscriptions. But so far, the streaming giant has seen its customer base grow since the crackdown began. In Q3, the streaming giant added 8.8 million subscribers —1.75 million of which came from North America.
“The cancel reaction continues to be low, exceeding our expectations, and borrower households converting into full paying memberships are demonstrating healthy retention,” Netflix said.
Along with paid sharing, the company has been attracting new users through an ad-supported Netflix plan, which was introduced a year ago and costs only $6.99 per month. The ad-based plan has since experienced major growth.
That said, Netflix could encounter pushback from consumers over a newly announced price increase. The company plans on raising the monthly fee for both its Basic and Premium plan for users in the US to $11.99 and $22.99, respectively. The prices for the ad-supported and Standard plan are not changing, for now.
In the earnings call, Peters also signaled that a larger variety of Netflix plans are coming. "I think it's also worth noting that we seek to have a wide and even wider over time range of price points with the corresponding set of features, of course," he said.