r/valueinvesting
Netflix is plugging password sharing loopholes
Netflix's new MFA and TF1 partnership will convert password sharers and add high-margin content, likely beating Q3 estimates.
- Strict MFA will convert 10-30% of the 100M password-sharing households into millions of new paying subscribers.
- Partnership with France's TF1 brings deep local content and high-margin revenue sharing at minimal cost.
- Cord-cutting trend gives Netflix leverage to sign more TV channels, expanding content and distribution globally.
Netflix is introducing multi factor authentication (Face ID, etc) tied to individual profiles beginning July 7. They will eliminate the loophole of traveling and SMS codes that has kept password sharing going.
Before the first round of password sharing restrictions a few years ago, Netflix had estimated 100 households sharing passwords. If even 10%-30% of those continue to do that today, that’ll mean millions of new additions to its existing 325 million subscribers.
This update was picked up by users and the media after Netflix began putting up pop ups asking people to enter an email to their individual profiles.
The stock is down and it seems management is working on multiple growth avenues. If this works, then Q3 guidance should easily top estimates.
One additional update that’s gone under the radar: Netflix signed up France’s market leading TF1 channels on to its app. It has got 20-something viewers and TF1 has deep local content. It’s a win-win for both sides. Brings in new content and revenue sharing on Netflix at minimal cost I.e. high margin.
This is a test case. With cord cutting as a global trend, TV channels have every incentive to sign up with Netflix to gain a new avenue of distribution. It gets them new viewers and gets Netflix more content and revenue sharing.
Considering what cable providers and YouTube TV charge, Netflix has a lot of room to run with this strategy.
Everyday it gets closer to a cable tv..
I pay $26.99/mo so I can add them on 3 devices of mine and one with my mother-in-law. She rarely watches it, as do I, but it's nice to have because I've had it for 20 years almost now.
I've dealt with all the price increases, cancelling TV shows after a season or two (Mindhunter), and the bouncing back and forth with authentication codes lately.
I'm tired of it. I sacrificed live sports via cable for cheaper TV entertainment in Netflix. With that gap closing and my income better than it was in my 20s and I miss live sports.
I have been doing research and apparently I can get DIRECTV and similar cable packages, with like Disney+ (requirement for kids), Hulu and ESPN. YouTube appears to be a decent option too. I just have to figure out what Bally Sports / Fan Duel for my Detroit teams.
If anyone has any suggestions or thoughts, I'm more than happy to hear them.
Are you me?
I just cancelled this month after having Netflix streaming since 2010.
Price increases every year. Locking down how many devices I can use it on. No premier original series anymore.
I have too many streaming services as is.
Ditched Netflix, Hulu, paramount and peacock.
Don’t miss any of them.
i pay less than $2 a month for a debrid service subscription and have a better than netflix experience in higher quality and can stream anything i want whenever wherever
I cancelled my old credit card tied to Netflix and the subscription went dark. Waiting to see if anyone in my family says something. So far, crickets…. Netflix has terrible content and is really overpriced.
Netflix sucks. Their restriction on password sharing when I was paying for 4 screens and only two users really using the account mean they lost a customer over being cheap
Hardly a few people will sign up. Netflix is too costly for what it offers.
Better to sign up for one month during summer or winter holidays to binge watch shows and then cancel.
They don't really have enough good content to keep the subscription running all through the year.
I'm being honest there are far better and cheaper services in terms of raw content.
In my country full HD cable costs less also.
These comments are the most bullish I've ever been on NFLX. Everyone at work I've talked to is not canceling NFLX. Every woman, including my wife, is not canceling NFLX. My kids love the content on NFLX more than Disney. I don't watch NFLX but I don't need to. My parents aren't canceling NFLX. Bunch of dudes in here need to realize you're not who NFLX is building content for.
I saw an interview with the CEO Ted Sarandos. The guy doesn't know anything about making good content and has clearly never worked in a production environment (just like all the other studio execs). This is what is going to drive them down as long as they are relying on their own content. Getting more subscribers by cracking down on passwords is just temporary and partial fix.
The board needs someone to helm the entire creative production pipeline. Someone who can balance money and creativity. They need to hire this person and then trust fall into their arms. They won't do this though. You don't get to be CEO of a company like Netflix by being a courageous risk taker.
Nah. If you tell them you're cancelling it they cry and whine and insist they are going to watch it....then they don't.
I'm already paying $100/month for a french horn I know damn well will never be played again.
Ah yes, alienating users will definitely help their business recover. Shit content, better streaming services, CEO departure, Paramount debacle. I tried for a while but sold months ago. Textbook value trap.
Bad bot
Losing a consistent paying customer since 2009 isn’t a big deal? Lmao TIL
These corps works in infinite growth. Eventually their enshitification strategies to skeeze customer base will bite them up.