Netflix, Disney, and the State of Paid Subscription Sharing
At the end of 2023, when Netflix reported eye-popping profits from its widely publicized crackdown on subscription-sharing and the surcharge sharers would henceforth have to pay, concerns arose around the industry that other subscription streaming services from premium to niche would soon be following suit and restricting the common practice of subscription sharing with their user base.
In this candid debate from February’s Streaming Media Connect 2024, Evan Shapiro, CEO, ESHAP, Alan Wolk, Co-Founder/Lead Analyst, TVREV, and Jon Giegengack, Principal and Founder, Hub Entertainment Research, discuss who’s cracking down and how much they’re enforcing the new restriction, and what if any benefit smaller-market services are likely to gain from following Netflix’s lead.
During the Q&A portion of the session, Shapiro read a question from a viewer: “Many others are following Netflix into page sharing as it showed great success for Netflix. Do you know who else is going in the same way?”
Shapiro says, “I'm going to toss this to Alan [Wolk], who is to me all things streaming, or to Jon [Giegengack], who tracks this subscription stuff pretty well, but I know Disney started to crack down.”
Wolk says, “They're all kind of doing it and kind of not. The thing is, they'll send emails here and there. They'll ask you to re-authenticate, but they're not telling people, ‘No more TV for you if you don't get a new account.’ They've been relying on threatening emails, and they all test it out in other places, but no one, not even Netflix, has rolled it out all across the board.”
Giegengack says that most smaller platforms have much more to lose than Netflix if they also crack down on account sharing significantly, whereas Netflix has the market dominance to truly take the chance of alienating users. “Netflix has replaced the old cable TV as the default thing people watch,” he says. “There's something on there for everybody. But I think if it's more of a niche, will you be willing to pay extra just to keep getting Paramount Plus because you really want to watch the Taylor Sheridan shows while they're still on?” He says that Netflix’s sheer scale protects it and allows it to call out people’s bluff, whereas that approach is much riskier for most other platforms. He mentions a viable alternative. “The way to generate more revenue would be to do what Disney Plus did when they launched and give you a deal on the price if you subscribe for a certain amount of time. I think that might be a better route for some of these platforms than really cracking down hard on password sharing.”
Shapiro says, “But doesn’t it seem to have worked incredibly well for Netflix? I mean, am I missing something?”
Wolk says it is simply a matter of Netflix having more runway to take a harder stance on subscription sharing. He argues that raising the price of ad-free versions to push users towards ad-supported options, following Amazon's successful model, may be inevitable. “They all got blindsided by Amazon, who basically came in and said, ‘Yeah, everybody's ad-supported now.' And we're estimating that’s somewhere between 50 to 65 million people. So they've got to catch up.”
Read Part One of our recap of Evan Shapiro’s Streaming Media Connect 2024 opening keynote, “No Quarter—Separating Fact From Fiction in M&E Q4 Earnings Reports.”
View full sessions from February's Streaming Media Connect 2024.
We'll be back in person for Streaming Media NYC on May 20-22, 2024. More details here.
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