Netflix Seen Cracking Down on Sharing to Bolster Profit

NetFlix recently reached their all-time high number of subscriptions reaching 29 million in the US alone. The company’s policy limits the customers to 6 different devices while only 2 of the devices can stream videos simultaneously. This policy is not enforced; therefore many people take advantage of this company policy. Netflix is planning to target this problem by either increasing their prices or enforcing limits on each account. Analyst believe that if Netflix follows through, that they may potentially gain up to 53 million subscribers by 2017. Chief Executive Officer Reed Hastings is deciding how to implement new policies so that Netflix can see a gain in subscriptions or revenue.

In my opinion, raising prices for Netflix could go either way for the company. It could definitely help boost sales if customers are forced to open their own subscription because of the enforced limit or the company can even potentially lose customers. Some customers only subscribe because they are able to share an account, therefore without this option anymore, Netflix could also lose current customers and struggle to find new ones.

Written by: Wilson Tang

Source:

http://www.bloomberg.com/news/2013-04-22/netflix-seen-cracking-down-on-sharing-to-bolster-profit.html

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