Netflix Moves Carefully To Keep 'Freebie' Subscribers - A Better View From The Top?

Perhaps now we will finally get a clue as to how popular Netflix is among people who seemingly have not been paying anything for the service -- that is, using someone else's login and password.

A message on its site officially offers a note (perhaps a warning?) that users who have been using a friend's/family login information -- not in the home of the original household subscriber -- will need to pay $7.99/month for the privilege of continuing to get the service.

While this might be upsetting to most, consider that the original price for Netflix's "Standard" ad-free platform is $15.49.

So paying in effect half of the list price would still be a good deal for the original ad-free SVOD service. At $7.99, that is just a dollar more than Nielsen's "Basic With Ads" option, launched last November.



Of course, it gets a bit complicated from there.

For example, targeted non-household members for that $7.99 deal will be singled out based on factors such as how often a device has used the ‘primary’ WiFi versus non-primary -- in other words, at someone else's home, for example. 

At the same time, primary account holders will need to set a “primary’ WiFi location. Those users would also be allowed to log in to Netflix while traveling. 

Going forward, analysts will be on the lookout for the all-important “churn” numbers -- those subscribers who on a month-to-month basis can opt out of the service -- only to perhaps opt back in at a later time. 

Netflix has had a churn rate as low as 2.3%. That means it has users glued to their screens. Should it be worried now?

Much “churn,” according to analysts, is primarily linked to the release of a new season's worth of episodes of one of their favorite shows -- something that is typical to all premium video streamers.

But Netflix typically has a low churn score. That is because -- according to loyal users -- there is always something good to watch.

If Netflix can curry favor here, it could show some stability with its subscriber numbers -- something analysts scrupulously examine during every company's quarterly earnings reports.

At the same time, Netflix continues to be the only big premium video service that is profitable on a regular basis. (Warner Bros. Discovery moved slightly in the black last quarterly period after big cost-cutting moves).

All that means Netflix continues to be in the driver’s seat. Netflix is looking to keep the momentum growing -- pretty much sticking to its high $10 billion- to $12 billion- dollar-a-year program TV/movie content production expenses. 

A new consumer marketing campaign touting all of this? If not, Netflix is hoping freebie looking subscribers will get the memo.

2 comments about "Netflix Moves Carefully To Keep 'Freebie' Subscribers - A Better View From The Top?".
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  1. Danny Vena from The Motley Fool, May 26, 2023 at 4:40 p.m.

    At $7.99, that is just a dollar more than Nielsen's "Basic With Ads" option, launched last November.

    I'm guessing you mean Netflix...

  2. Misha Growski from MG Consulting, May 30, 2023 at 3:05 p.m.

    This does not really work for university students, still a member of the core family, but away in dorms and off campus housing and cannot get back home to "log in" from the primary address every 30 days.  I don't see this as a way to curry brand loyalty with the younger target with a lack of their own finances.  They should be able to register with their university ids - how is that for thinking out of the box.  DUH !

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