It’s been an interesting week at Netflix, with US subscribers falling by 120,000.
Another interesting piece of Netflix news has been about password sharing. According to analysts MoffettNathanson, 14% of Netflix subscribers share their password, and only 6% share their Amazon password to access Prime video.
The reason why password sharing on Amazon Prime is much lower than Netflix is probably because it’s easy for a friend to purchase an Amazon product once you give them your password. Possibly just as undesirable – it’s straightforward for people to review purchases on your account once you have given them your password!
I’ve been asked a few times this week, why Netflix and Amazon don’t clamp down on password sharing. I think the answer lies with a comment from Spotify.
Think of those Netflix users who are using someone else’s password as ‘freemium’ subscribers. Spotify encourages freemium (non-paying, or trial) accounts to learn “that music is an important part of their life worth paying for”. And consider the data from those listeners, how Spotify can “learn from the biggest possible group of music fans in the world.”
Freemium places a user on the path to a sales conversion. It’s a far better path than traditional or digital marketing channels. When people share a password, it shares the value of the product, that might want to make them ultimately go and buy the product.
— Lee Burgess (@LeeBurgessPSR) December 10, 2016
Netflix has a vastly different strategy to Spotify though. Netflix is testing the maximum price that users are willing to pay for the service. It recently increased the monthly subscription cost in the US from $11 to $13. Continue reading Why Netflix and Amazon (probably) don’t mind users sharing passwords