NEXTflix Problem

Netflix is taking a bold move after spending over two years recovering their losses from their last big controversial pricing and programming change. The Netflix CEO Reed Hastings is doing everything possible to avoid another Qwikster disaster.

Since their lose of nearly 800,000 users and 75% of it’s value, Netflix has worked it’s way back to the top with over 29.1 million members, surpassing enterprises like HBO. [1] However, Netflix could not have done this without turning back the focus to their users wants and needs.

Netflix has done a great deal to reinvent their service, pricing and licensing deals. Recently, Netflix has utilized Facebook to create a Netflix Social , where users can link their facebook and Netflix account and view tabs of “what your friends are watching” or “friends favorite”. [2] Netflix also just made a deal with Dreamworks to begin producing another Children’s original animation series. [3]  Furthermore, Netflix’s production and release of 15 new episodes of the popular show Arrested Development  has also received a lot of praise by Netflix users..[4]

Despite their growth and efforts to reconstruct their service, Netflix has run into a new growing problem.

Their current problem is that over 10 million users are not paying for the streaming service Netflix’s CEO is trying to be very cautious about handling the shared user and password issue. Hastings does not want to lose or ban viewers, but instead he wants to keep people positive and excited about Netflix’s service.[5]

Analysts insist that Netflix’s profit would exponentially increase if Hasting’s cracked down on the issue. One analyst believes they could be making up to 5% more per subscriber if they fix their current pricing or offer different plans for users.[6]

Instead, Netflix’s CEO is celebrating the idea “that people love the service”. [7]

The new plan that will be unveiled will allow four streams for $11.99, while the current pricing of $7.99 for two streams per account will still be available. They expect less than 1% of customers to opt for the new plan, but they hope as their service becomes in bigger demand that users will begin to see the value.[8]

Other plans consist of adding a $3 increase for added users , adding extra fees for children programming or limiting the number of devices that can be attached to the account. [9]

Netflix users are vulnerable  since the last price and policy change, so Hastings needs to remain very sensitive to the issue in order to sustain their level of expansion and growth in the market. Therefore, Hastings is not interested in making any drastic changes, but slowly implementing different plans with added benefits.


Whether you are a current Netflix user or considering a subscription to Netflix, what plan or price increasewould drive you away? What added benefits or licensing deals would make you keep your subscription?


9 thoughts on “NEXTflix Problem

  1. I use Netflix religiously, however, I am guilty of using my moms account. Only because she no longer uses it, but pays for the service so that my brother and I can watch it. I would be really upset if I had to get my own subscription due to the idea of banning the sharing of account information. Although, I do understand why it would be a good idea to limit the users because the company needs to expand and continue to raise their profits. Either way I would still continue to use Netflix whether I had to get my own account or not. And I would probably pay $10 for streaming at most because even though there is a lot of television/movies on there it is still very limited. Also, if Netflix would continue to make their own series or get more rights to other films I would be more apt to continue subscribing.

    1. I enjoyed this post. Netflix has a great concept and business model, but they need to improvise in order to stay successful. I too am an avid user of Netflix, and could not imagine TV anymore without it. Almost everything I watch other then sports is from instant streaming. I do think consumers like myself would be disappointed if they limited the number of devices that can be connected. Although they would be disappointed I doubt they would cancel their subscriptions. In fact this would induce people to quit sharing accounts as many do.

  2. As a college student who is very conscious of my income versus expenses, I do not currently pay for a Netflix subscription. I have never had an account with Netflix and do not consistently watch television or movies online. When I have viewed shows or movies through Netflix, I watched them while using a family member’s account information. If Netflix were to tighten the policy for number of viewers per subscription, I would stop using Netflix altogether, at least until I were self sufficient. I pay my monthly cable bill and have enough entertainment variety through my television package to keep me satisfied. If Netflix is hoping to expand their company, they may need to implement the new user policy. It sounds as if they are missing out on a lot of revenue, but Netflix needs to gradually implement stricter policies. If they change overnight, they have the potential to lose millions of customers.

  3. It seems that Netflix like many other companies always run into the same issue of weather or not to charge more for extra users. The problem with this is that if Netflix decides to increase prices they will lose out on a lot of subscribers. Personally, I would be pretty upset if I was limited to the number of devices I can use my account on. With the smart t.v., laptop, Ipad, cell phone ect…as more technology increases this will affect if I am able to use my account. However, Netflix is losing a lot of money and since last year it has just started to jump back from all the users it had lost when they first increased prices.

    1. I agree with your point regarding the numerous devices that must be attached to Netflix accounts, but unless my understanding of the new plan issue is flawed, it sounds like the number of devices a user may attach to is not to be limited, but rather the amount of streams that can be active at any given time.

      It is certainly reasonable for Netflix to crack down on the account sharing issue, but that issue may seriously diminish the appeal for families who use the service. While a $4 increase to have four active streams is certainly far from unreasonable, it will come at the expense of a sum of customers. I personally split the cost (paying alternate months) with my younger brother and we are the primary users on the account, but since my parents will occasionally watch too, I would be upset if I were to be dropped off of a stream if they got on. I would assume though that I would be inclined to pay more for the service if need be due to the recent push towards original programming.

  4. I also use Netflix and remember asking myself why they would allow streaming on multiple devices at the same time. This decreases subscribers due to sharing account information. Before creating my own account, I used my friend’s subscription. I think increasing prices to reduce sharing account information would be a great idea because then people who have used Netflix and enjoy it, would be forced to pay for their own subscription.

  5. I too use a Netflix account which I do not pay for. On that account is my teenage sister, parents, and myself. A problem we run into while using Netflix is the recommended shows. We get such weird suggestions because we all have different taste in television and movies. I agree with bavitia that I am very surprised they haven’t addressed this issue earlier. Netflix never specifically said you can’t stream on more then one device at the same time. I do think they will lose some customers because people get used to have things and they don’t like getting things taken away. Netflix should have a family plan subscription because there are many device it can be used on. A family plan would also allow different users on the same account to get propper recommendations. What do you think? Family plan or not?

  6. I agree that Netflix needs to revamp some of their business models. Instead of giving all their users the option to host the Netflix account on eight different sources they should limit it to two or three. This way all the free loaders that are using someone else’s account have to finally penny up and subscribe to the subscription themselves. I think they should make this change first nstead of going from 7.99 a month to 11.99. I know it is a minimal change; however they are still going to be loses the sales of a ton of consumers if the don’t change their business model. I know that the CEO is happy with people loving the service, but it may be time to move away from that a little bit. Netflix is now established and should be making a lot more money than they are.

  7. I agree that Netflix needs to come up with a new business model, especially since blockbuster is now doing the same thing as well. Makes me as a consumer wonder how it benefits me to stay with Netflix and not switch to Blockbuster. To answer the not allowing for Netflix to stream on multiple devices, I have ran into that issue actually. My parents would watch it in their room, my brother on his Ipad and I would watch it on my laptop. Therefore it seems that they have resolved that issue.

Leave a Reply

Your email address will not be published. Required fields are marked *