Should Netflix Crack Down On Account-Sharing Freeloaders?

Do you share your Netflix streaming account with a friend or relative who lives in another household? The company’s current policies are pretty liberal, but if they want to increase profits without raising subscription fees in the future, one option that they have is to tighten up those policies.

While customers can only watch two streams at the same time from the same account, there’s no stated limit on the number of devices that one member can use with one their account. Earlier today, before results for the first quarter of 2013 came out, Bloomberg talked to some analysts and speculated that culling freeloaders is one way that the company could save money…and perhaps gain some new paid subscribers.

One estimate (not confirmed by Netflix, of course) is that there are as many as ten million people streaming content from others’ accounts. By cutting off those users or charging subscribers extra to authorize more devices, the company could boost their profitability, but would it come at the price of another revolt like the one in 2011?

The company announced its results for the first quarter of 2013 this afternoon, which were better financially than their results from this time last year in the aftermath of Qwikster. One interesting tidbit is that they’ve lost DVD subscribers: they had just under 10 million at this time last year, and currently have just under 8 million. Oh, and about that sharing-accounts thing…they’ll be offering a plan that lets users stream more from a single account. To watch up to four streams on four different devices at the same time, customers can pay an extra $4. That’s not tightening up access for freeloaders, but might be the first step in preparing customers to pay more if they connect more devices.

Netflix Seen Cracking Down on Sharing to Bolster Profit [Bloomberg]
Letter to Shareholders [PDF download]

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