They shouldn't have tried to tackle password sharing. Instead they should have enforced concurrent streams and let people pay for more concurrent streams.
Psychologically it's very different and people paying for the premium plan of 4 streams would probably not be affected.
Four adults that live in four different houses sharing one Netflix account might not ever bump up against the four concurrent stream limit. Their concurrent usage might be quite similar to a family of four under one roof.
But critically, the four adults are all technically capable of paying for their own subscriptions, while the children of the family of four are not.
Netflix is expecting to lose some (or most) of the people who are sharing passwords, but if some nonzero portion of them end up coughing up money for their own subscription, the effort is worthwhile.
Realistically, the case to allow password sharing is four family members, living under the same roof, but not sharing the same internet connection.
If the family is watching Netflix on their own phones over cellular (respectively: on train, out walking, at work, at school), you can't impose password-sharing restrictions on the account without fucking more than one of them over.
Yes. They've been doing more or less what the parent comment suggested for a very long time.
If, for example, when you click "play", some other user on your account gets kicked off with an error about hitting the stream limit, then you will forever be worried about hitting that limit and inconveniencing family - so you may upgrade sooner. Being kicked out mid show and unable to continue until you click to upgrade is going to lead to lots of people upgrading in frustration.
My hypothesis is that Netflix knows that account sharing is a net positive, as it cannot be curbed without losing a significant amount of subscribers, and many people aren't willing to pay $10 per account.
The shared resource thing, is just Netflix turning a blind eye, because their business model worked for a time and allowed this to happen. Now that DVDs are all but dead, this was the next logical business revenue model that needed a revamp.
How can anyone blame Netflix for FIXING a loss leader in their business line(s)? We all run and work for start-ups .. its the natural progression of finances at scale.
Anyway, the punchline was that Microsoft wasn't interested because it wouldn't catch all illegal licenses.
If subscriptions don't go up afterwards and streaming infrastructure costs are a sufficiently small portion of their total expenses, then I could see it being a net negative. In any case, their biggest problem is that their content has become so mediocre, but this action won't have any effect on that.
Unfortunately, the lasting affect will be a net positive, because sometimes you have to just be the adult and say loosing money isn't an option. I would like to call this shedding the college weight, and firing 80% of the work force, because the business will die otherwise in the case of Twitter.
Would you rather run a business with much higher ROI with a small user base and run a lean business, or a fat business with super scale data but bleeding out money? I'm not sure I get the argument against this.