Netflix has announced some changes, and even though they may be expected, for many, it means the end of an era.
First, Netflix is ending its DVD rental business at DVD.com. Sending movies through the mail was what made Netflix a household name.
But now, after 25 years, the last rental discs are going to be sent out September 23rd.
The company hasn’t released DVD subscriber numbers for a long time, but they stated the market “continues to shrink”, which is obvious with the focus on streaming.
Still, over the years, according to Netflix, they’ve have 40 million members and shipped over 5 billion movies. And plenty still rent discs today. For some members, disc rentals allowed them to watch rare and niche titles, and others liked it since Internet service isn’t fast and/or reliable where they live.
The DVD rental business may have fallen from grace, but without it, Netflix would never have become the king of streaming.
Some analysts question if the king of streaming is still struggling despite the good reception for their ad-supported tiers. Netflix has added subscribers and revenue is up for the first quarter of 2023, but numbers were lower than analysts’ and their own predictions.
Netflix’s estimates for Q2 are also lower than what many expected, and as The New York Times explains:
“The company faces serious headwinds, including a possible writers’ strike, increased streaming competition and a burgeoning live business, which faltered over the weekend when technical difficulties delayed Netflix’s much-hyped ‘Love Is Blind’ reunion show.”
Another factor that could play into Q2’s subscriber numbers is the fact Netflix is going to expand their password sharing crackdown to the US and other locales in Q2.
Yes, the company that once tweeted, “Love is sharing a password” now doesn’t love sharing passwords.
Netflix originally tested this in a small number of Central and South American countries before adding Canada and a few other nations earlier this year. Netflix originally wanted to implement these restrictions in more countries, but the crackdown for the US and other regions was delayed to Q2, which is from April to June.
The company estimates 100 million households are using Netflix without having an account, and Netflix hopes to turn many of those into paid subscribers. Based on other countries’ experiences, it’s likely US accounts on a Standard or Premium will have the option of adding up to extra members for about $5 more a month, up to two. Otherwise, these extra households can transfer their profile to their own full membership.
One survey found 13% of customers would cancel if the password sharing crackdown came to the US. Netflix expects some cancellations but points out that in Canada, for instance, the number of paid subscriptions went up after the $7.99 CAN for sub-accounts.
The Streamable previously spotted an updated FAQ page with details about how Netflix would determine if multiple households are using the same account. While it was taken down, the info indicated users may need to enter a verification code from a phone and/or sign in with their device on home Wi-Fi every month. Netflix can be used while traveling, but with limits and on a short-term basis.
Even with a lot of beta testing, there will likely be bumps in the road from frustrated customers: heavy travelers, seasonal snowbirds, deployed military, those staying temporarily with a friend/relative due to a housing issue, children of divorce, etc. With the US having so many streaming options compared to some other countries, it will be interesting to see how the subscriber numbers play out. Assuming the US is about $5 per month, options like Peacock and Paramount+ are available with ads for about that price. Sure, those services have much smaller catalogs (especially in certain genres, like anime), but they also haven’t started cracking down on password sharing and will have the verification hurdles like Netflix.
But either way, between the end of DVDs and password sharing, for many, it’s the end of an era for Netflix. Neither may be shocking changes considering how viewership has changed over the years, but some people are going to have to change their habits as a result of Netflix’s quest to ensure max profitability.