Netflix Ads, Password Sharing, and DVDs
Netflix said that it would be increasing the video quality of its Basic With Ads tier to 1080p at no extra cost to subscribers. Additionally, it said it would increase the number of simultaneous streams from one to two.
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Netflix revealed in its earnings report that its Basic with Ads plan already brings in more revenue than its Standard plan, which costs $15.49 per month and offers HD quality streaming.
Netflix is planning a “broad rollout” of the password sharing crackdown that it began implementing in 2022, the company said today in its Q1 2023 earnings report [PDF].
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When Netflix brings its paid sharing rules to the United States, multi-household account use will no longer be permitted. Netflix subscribers who share an account with those who do not live with them will need to pay for an additional member. In Canada, Netflix charges $7.99 CAD for an extra member, which is around $6.
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Netflix users will need to establish a primary location, and subscribers who are not at this location will not be able to use the service through that account. There are allowances for travel or second homes, with Netflix requiring users to open the Netflix app at the primary location once per month.
Even in 1998, when the company mailed its first DVD — the 1988 cult classic Beetlejuice, in case you’re wondering — it was already imagining a world without discs. The company was called Netflix, after all, not DVDsByMail.
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Now, Netflix is officially getting out of the DVD business. The company announced along with its quarterly earnings that it is planning to shutter DVD.com, which is the new name for its DVD by mail business. (You might remember when Netflix tried to spin out this business under the name Qwikster, which remains one of the worst product names of all time and lasted all of about a week. But the less we talk about Qwikster, the better.) It will ship its last discs on September 29th, and I have a sneaking suspicion you won’t need to return them.
At this moment, Netflix is streaming about 3800 films - less than half of what the average Blockbuster used to carry.
As for films made before 1990? Only 79 titles are currently streaming. If we go to 1980 or earlier, that drops to 36 (!)
Previously:
- Arrested Development Leaving Netflix Soon
- Netflix Homes and Games
- The Former Netflix DVD Library Is a Lost Treasure
- Netflix vs. Blockbuster Total Access
- Netflix and Qwikster
Update (2023-04-27): Clara Hernanz Lizarraga and Thomas Seal (via Hacker News):
Netflix Inc. lost more than one million users in Spain in the first three months of 2023 according to market research group Kantar, a sign that the streaming giant’s crackdown on password-sharing could face pushback.
Update (2023-05-24): Zac Hall (Hacker News):
The company’s crackdown on password sharing has been ramping up across the globe for a while now, and starting today, Netflix is bringing it to the United States.
In a post on its Innovation blog, Netflix announced that it will now begin notifying subscribers who are sharing accounts between households of the need to pay up.
Wait a second, I'm on the highest Netflix plan which I thought was a family plan? Now they want me to pay extra just because I have kids off at college? Makes me want to either just downgrade or cancel all together.
Update (2023-06-13): Juli Clover:
Just after putting an end to multi-household password sharing in the United States, average daily signups to Netflix reached 73k per day, a 102 percent increase from the prior 60-day average. Netflix saw close to 100,000 daily signups on both May 26 and May 27, beating out signups even during COVID lockdown periods.
Update (2023-06-26): Chris Adamson:
We worried that streaming was going to reinvent the cable TV subscription, by costing just as much to subscribe to all the different services. We never imagined it was going to reinvent broadcast TV from the 70s, when shows get canceled and taken down, never to be seen again.
Or, for older shows, only seen on DVD.
Update (2023-06-27): David Friend:
Netflix Canada is done with being basic.
The streaming giant says it’s phasing out the $9.99 “basic” option from its price plans, taking away the cheapest subscription without ads.
Update (2023-07-26): Juli Clover (Hacker News):
Netflix today quietly eliminated its most affordable ad-free plan in the United States and the United Kingdom, raising the price of ad-free streaming options.
In the U.S., the Basic plan was priced at $9.99 per month, and with its removal, ad-free streaming now starts at $15.49 per month. Netflix subscribers can opt for the $6.99 per month “Standard with ads” plan, but that price point includes advertisements.
Netflix earlier this year began cracking down on password sharing in the United States and other countries, and the effort has been successful, the company said today. Netflix gained 5.9 million new global subscribers in the second quarter of 2023[…]
Jose Fernandez, Ed Barker, Hank Jacobs:
Basic with ads was launched worldwide on November 3rd. In this blog post, we’ll discuss the methods we used to ensure a successful launch[…]
Update (2023-08-24): Nikki Main (via John Gordon):
Netflix’s DVD subscription platform will allow subscribers to keep their final delivery of DVDs as the company prepares to close its 25-year-old service, the company announced on Monday.
Update (2023-12-08): Janko Roettgers:
But as old-school as Netflix’s DVD business might sound, the service has been anything but low-tech. In order to send out more than 5 billion discs to millions of subscribers over the years, the company deployed cutting-edge automation, embraced machine learning before it was cool, and laid the technical and financial foundation for what would ultimately become the massive, worldwide streaming business Netflix is known for today.
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At first, Netflix introduced machines to stuff its iconic red envelopes, to the tune of 4,500 discs per hour, and sort them by zip code for shipping. Then, it also automated the processing of returned DVDs. Netflix commissioned Bronway, an Ireland-based company that had been building machines to pack and ship CDs and DVDs for clients like Microsoft and Nintendo, to make a machine for its incoming mail.
Netflix has been “completely satisfied” with the pace of the password sharing crackdown it initiated in the United States earlier this year, Netflix co-CEO Ted Sarandos said today at the UBS Global Media and Communications Conference (via Variety).
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According to Netflix, an estimated 222 million paying households were sharing with an additional 100 million households that were not being monetized.
Following the password sharing crackdown, Netflix said that it saw strong subscriber growth in countries where password sharing was restricted. Netflix in Q2 2023 added six million subscribers, including more than a million in the U.S. and Canada. Revenue increased in every region where paid sharing was rolled out, and signups ultimately exceeded cancelations.
Update (2024-04-24): Dare Obasanjo:
Netflix’s password sharing crackdown and addition of cheaper advertising based tiers continues to bear fruit. Subscribers rose 16% to 269.6M blowing away expectations by 5M.
My mom is retired and on a fixed income. I have not received a raise in over 5 years.
We share logins to VOD/Streaming sites with each other to save money and roughly each split up the burden.
Both of us combined, stream FAR less than the typical 4-5 person family. We just happen to live in different households, within the same city.
If Netflix has a problem with this, they can quite frankly, kiss our combined total ass.
Instead of $12 or $666 or whatever the hell it is this week thanks to inflation, they shall receive NOTHING. She has Telco Fiber and I have Telco VDSL and Home 5G and I'll easily use all 3 to acquire their content via "alternative methods".
Honestly, the providers really do not give a shit, as long as we all pay our bills.