1. Netflix’s Password Sharing Crackdown Creating More Problems Than It Is Solving
So Jimena Ledgard and Andrew Deck at Rest of World broke a story this week about the clusterf..k that is Netflix’s attempt at cracking down on password sharing in Peru, Chile and Costa Rica.
The TL;DR is sort of what you’d expect—notices sent but not followed up on, no clear messaging about what to do next and a general sense that Netflix isn’t all that serious about the crackdown, at least not yet.
Why it Matters
For those of you who may have missed it, one of the many things Netflix is working on to regain investor confidence is a plan to crack down on password sharing and to do so they are running a pilot program, so to speak, in the three aforementioned Latin American countries.
Some Wall Street analysts have reacted with glee, claiming this will net Netflix millions, others have remained skeptical.
Count us in the latter camp.
Here’s why we’re skeptical:
A Netflix subscription is no longer a must-have. Netflix is not exactly new. Which means many of those password-sharers are the now adult children of account holders who grabbed the password when they were still living at home and thus continue to use it on occasion. But force them to get their own accounts and they may decide it is not worth it. There are now many other options out there, many of which they may find themselves watching far more often, none of which is forcing them to stop logging in with Mom and Dad’s account, and so bye-bye Netflix.
Netflix actually has tiers. Many of those parental units with accounts have either the premium Netflix plan at $19.99/month, that allows simultaneous viewing on up to four devices or the standard Netflix plan at $15.49/month that allows for simultaneous viewing on two. They likely signed up for those plans on the assumption that one or more of their kids might be watching simultaneously, an assumption that dated back to when said offspring were still living at home.
Force everyone to get separate accounts and many of those premium parents may drop down a tier, or even two to Netflix’s basic plan which, at $9.99/month, only allows for one screen at a time but does not allow for HD, something that may not matter all that much to people who rarely watch Netflix. Even so, the $4.50 drop from premium to standard alone may well offset whatever gains Netflix is making if enough people go there.
Why piss people off? This is the number one reason we’re skeptical. Netflix’s decision to double down on reality and other non-HBO-like programming has already helped create the impression that much of what is on Netflix beyond Stranger Things is crap. This at a time when most of their competition are rolling out shows that aren’t crap, and, most importantly, are not snooping around to see who on their account is watching from where and sending threatening emails. (No matter how nicely worded the email is, it’s going to sound stalkery and threatening.) Bottom line being this is not going to help viewer’s growing negative impression of Netflix, an impression that is no doubt not helped by the current spate of incorrect headlines proclaiming that Netflix is seeing “massive subscriber loss.”
So there’s all that and then there’s the fact that subscription TV services are not the only place where 20somethings remain on their parents accounts— SEE ALSO: Phones, Mobile and Insurance, Auto.
Meaning it’s best to just roll with the way things are going, even if you are technically in the right.
What you need to do about it
If you’re Netflix, clearly you want to stop trying to make your subscribers feel like criminals, criminals whose internet history you’ve been avidly delving into.
There are likely clever marketing and promotions-based ways to get young people to voluntarily sign up for their own accounts. You can even gradually raise the price for your Premium tier, which will have the same effect on your bottom line. But given all the competition you are facing these days, you do not want to risk giving people a reason not to like you.
If you’re one of the other Flixes, look at what is going on with Netflix and learn. Creating plans that limit the number of simultaneous streams seems to be the way to go and avoids you having to look into where all those streams are coming from and guilting your subscribers about unauthorized users. It’s just one of those “no good can come of this” situations and you do not want TV to go back to the days of #ComcastSucks.
2. NESN Launches First Streaming RSN
As if Boston sports fans needed to give us a reason to hate them even more, they now have access to the nations’ first streaming RSN service, from Fenway Sports Group’s New England Sports Network (NESN.)
The service, dubbed NESN360, will cost $29.99/month, with the first month being just $1. Annual subscribers will pay just $329 for a plan that also includes eight Red Sox tickets, a wicked awesome value.
The service includes Red Sox (MLB), Bruins (NHL), Connecticut Sun (WNBA), Worcester Red Sox (AAA), Hockey East (NCAA) and ACC (NCAA) games and will be available throughout New England, save NYC-adjacent Fairfield County, CT.
Why it Matters
NESN will soon be followed into streamingdom by 17 RSNs owned by Sinclair, via their deal with Bally’s.
That, as the saying goes, changes everything.
RSNs appeal to fans of a specific team who tend to be far more loyal than generic sports fans and are willing to pay a decent amount of money for the ability to watch their favorite team play all season long.
That is why RSN rights have been so valuable—fans have traditionally signed up for whatever overpriced tier the MVPDs included the RSN in—but they also serve to drive up the overall cost of the bundle, and is why vMVPDs—Hulu and YouTube in particular—have not included them in their (untiered) offerings.
Which means that the new streaming RSNs may help convince sports fans who’ve been on the bubble about cutting the cord to go that way. Or at least switch to a vMVPD.
More than that though, they provide a way for major league sports to reach younger fans, something they desperately need to do.
While a 24 year-old Red Sox fan may not want to cough up over $100/month for a cable plan that includes NESN, they are likely to decide that $30/month from April to October is money well spent as they can watch all the games they want, both on TV and via their laptops or smartphones.
This is key for the MLB in particular, because baseball desperately needs to start seeming like it is a part of the 21st century and not just a leftover plotline from “Field Of Dreams”. Meaning the more baseball can lead the way into the future (or at least the future of television), the better.
What you need to do about it
If you are in any way involved with MLB, the NHL or the NBA, do not discourage this sort of thing. It is only going to get you more fans, more revenue and more people you can market your merchandise to.
Yes, you should probably set up your own streaming service at some point, but rounding up team owners and getting them to agree to that may be only marginally easier than rounding up cats.
So take the bird in the hand while you still have the chance to make leeway with fans under the age of 50 and let them stream.
Because every time there’s a headline about how you are trying to stymie this, you only turn more younger fans off.
If you are Sinclair/Ballys, I’m sure you don’t need us to tell you this, but take notes: monitor social media comments about NESN 360 to see what is working and what is not.
If you are involved in any way with the YES Network, please, please, please launch a streaming RSN. Since the Nets seemed to have a shot earlier this year, ESPN carried a lot of their games this past season, but it was just not the same thing. And I miss Ian Eagle. Thanks.
Alan Wolk is co-founder and lead analyst at the consulting firm TV[R]EV. He is the author of the best-selling industry primer, Over The Top: How The Internet Is (Slowly But Surely) Changing The Television Industry. Wolk frequently speaks about changes in the television industry, both at conferences and to anyone who’ll listen.
Wolk's Week in Review is an opinion column. It does not necessarily represent the opinions of Fierce Video.