Netflix's Crackdown on Account Sharing: Why Now?
date
Jun 4, 2023
slug
netflixs-crackdown-on-account-sharing-why-now
status
Published
tags
Streaming
Business
summary
Imagine a world where sharing your Netflix account with friends and family was the norm. For years, Netflix turned a blind eye to this widespread practice, allowing users to freely share their login credentials. But why the sudden change? What prompted Netflix to crack down on account sharing?
type
Post
When we contemplate business decisions, we must always remember an immutable principle: the implementation of a decision depends solely on its benefits.
With this principle in mind, observing the global streaming platform market's development sheds light on why Netflix has recently started gradually cracking down on account sharing. From a technical standpoint, tackling account sharing is not difficult for Netflix, yet they have never seriously addressed the issue in the past decade. This indicates that the market expansion benefits derived from account sharing far outweigh the profit losses it incurs. In other words, the previous focus of Netflix was on "scaling up" to increase market visibility. This led to more investments and the production of outstanding content. The arrival of Covid-19 propelled Netflix to a pivotal point.
However, Netflix is not the only player in this market. The spread of the pandemic has prompted an increasing number of competitors, especially traditional broadcast television companies, to recognize the potential benefits and resist being left behind in the digital age dominated by Netflix. Consequently, numerous television broadcasters have embarked on digital transformation and entered the streaming media landscape, leveraging their accumulated content over the years. Since the onset of Covid-19 in 2020, Netflix has faced a different set of competitors: globally, it must contend with the gradual invasion of giants like Amazon and Disney, while in various local markets, it confronts strong competition from newly launched streaming platforms by local broadcasters. These platforms, well-versed in local audience preferences, pose a formidable challenge to Netflix that was previously unforeseen. This growing realization has prompted Netflix to place greater emphasis on producing local content, exemplified by the success of the Korean series "Squid Game" that Netflix capitalized on.
However, this alone is not enough. Rising production costs and customer attrition resulting from intensified competition have compelled Netflix to prioritize revenue for the first time. Netflix previously dismissed advertising and openly expressed disdain for it. Yet, after reporting subscriber losses, it introduced a subscription plan featuring advertisements. This once again underscores the principle that business decisions are driven by considerations of profitability. The previous Netflix had the confidence to reject advertisements, but when it lost that confidence and required additional revenue, what value do such lofty proclamations hold?
Looking back at the events surrounding account sharing, it was merely a decision made by Netflix to increase revenue and commercial benefits. As evident from Netflix's user terms, account sharing was never considered compliant behavior. However, the previous default policy of Netflix was built upon the market expansion benefits brought about by account sharing. When those benefits waned, the era of account sharing naturally declined.
當我們思考商業決策時，必須牢記一個不變的原則：決策的實施與否取決於其帶來的利益。
當你帶著這個原則，觀察全球串流平台市場的發展情況時，就會明白最近Netflix逐漸開始打擊分享帳戶的政策的原因。從技術層面上來看，打擊分享帳戶並不困難，但過去十年Netflix卻從未認真對待過這個問題。這其實表明了分享帳戶給Netflix帶來的市場擴張的紅利遠大於由此導致的利潤損失。換句話說，以前的Netflix更想要「走量」，來擴大市場知名度。因為這會帶來更多的投資和更多的優秀節目。而Covid-19帶著Netflix到達了一個階段性的最高點。
但這個市場不只有Netflix一個玩家。疫情的蔓延使得越來越多的競爭對手看到了利益，尤其是傳統廣播電視公司更不甘在數字時代被Netflix遠遠甩到後頭。因此，越來越多的電視廣播公司帶著多年的內容積累開始了數字轉型，入局流媒體。從Covid-19開始的2020年至今，Netflix面臨的競爭者已經不同以往：全球範圍內它需要面對亞馬遜和迪士尼等逐漸入侵的競爭；在各個本地市場，它還需要應對本土廣播電視公司新推出的串流平台，而這些深諳本土用戶品味的平台對Netflix是一個之前沒想過的強力競爭對手。這讓Netflix越來越意識到本地內容製作的重要性，例如在韓國製作並大火的《魷魚遊戲》就是Netflix嚐到甜頭的一個例子。
然而，這還不夠。不斷上升的內容製作成本和競爭導致的客戶流失迫使Netflix首次將營收納入考慮範圍。Netflix曾經對廣告毫不在意並公開表示厭惡，但在首次報告訂閱流失後，它推出了帶廣告的訂閱計劃。這再次證明了商業決策取決於利益與否的原則。以前的Netflix有底氣拒絕廣告，但當它失去了這份底氣並需要更多利益時，這些豪言壯語又算得了什麼呢？
回顧分享帳戶事件的始末，不過是Netflix為增加收入和商業利益而做出的一項決策。從Netflix的用戶條款來看，分享帳戶從未被視為合規行為，但以前的Netflix在分享帳戶帶來市場擴張紅利的基礎上建立了默認政策。當這種紅利消失時，分享帳戶的時代自然而然地走向衰落。