Netflix still charging Canadians who share passwords but not Americans — for now
CBC
The extra fee Canadians pay Netflix for the privilege of sharing their passwords with others across multiple locations was supposed to roll out for U.S. customers months ago. However, despite saying the extra charges were "positive" in Canada, the streaming giant is delaying charging Americans the same price they charge Canadians by several months.
Those results include Netflix reporting that "revenue growth has accelerated" in Canada and that it has more customers in this country than before it started charging extra for password sharing.
So despite Netflix seeing financial gains in Canada from charging more for password sharing, and telling its investors it believes the Canadian market is a "reliable predictor" of the U.S. market, it has still opted to delay charging American consumers more by months.
Experts such as John Buffone, vice president and media industry analyst at market research firm Circana, told CBC News that Netflix could be reticent to make changes to such a large part of its business.
"If you were the company testing something that you know is not necessarily going to be met with a whole bunch of smiley faces from viewers? You're not going to do that in your largest market, the United States," said Buffone, speaking from Oceanside, New York.
According to Buffone, Netflix as a company would greatly benefit from what amounts to a price increase for many customers.
"if they successfully transition over to what they're calling a paid password sharing model, this is the greatest potential revenue gain for the company," he said.
According to Netflix, more Canadian subscribers ended up with the company several months after the increased charges.
It's now planning to start charging Americans the same fee sometime before July, after an original plan to begin the U.S. charge by March.
But Buffone pointed out American consumers may not react as Canadian consumers did.
"A misstep here could send stock prices tumbling," he explained, comparing any rapid change made today to when Netflix — unpopularly — tried to split its then DVD-by-mail business into a separate service from its internet-based service in 2011.
At the time, subscribers complained and the company's stock fell by more than half.
At least one film industry watcher in Canada said it's not a surprise Netflix is willing to experiment with charging Canadians more, while remaining fearful of American reaction.
"I mean, we're less than 10 per cent of the U.S. market so they can take some carelessness with our own Canadian market because it matters less," said Vincent Georgie, assistant professor of marketing with the Odette School of Business at the University of Windsor.
