Netflix’s new 'Profile Transfer' feature is secretly all about password crackdowns

Netflix has rolled out a new feature that allows you to transfer your viewer profile from one account to another.

While that’s convenient for some, it’s hardly game-changing for most.

But that, of course, is far from the whole story. What it really is, though, is another quiver in the streaming company’s commitment to cracking down on password sharing. It just won’t tell you that outright.

It’s a classic softening-the-ground tactic, designed to have in place rebuttals to the inevitable backlash that will come.

Consider how Netflix announced this fancy, supposedly in-demand feature. It’s been packaged as a feature for viewers who find themselves, for example, in a relationship breakdown and want to take their profile with them, even if they have to leave behind those wine glasses and their emotional stability.

“People move. Families grow. Relationships end. But throughout these life changes, your Netflix experience should stay the same,” Netflix’s announcement claimed.

“No matter what’s going on, let your Netflix profile be a constant in a life full of changes so you can sit back, relax and continue watching right from where you left off.”

If you took that marketing guff at face value, it’s practically altruistic.

Sure, if you’re moving out of a share-house, it would be great to just take with you that viewing history and those imperfect algorithmic suggestions that for months kept pushing ‘Nailed It’ despite the fact you dropped it after eight minutes.

When Netflix starts to enforce its ban on password sharing – giving your login details to someone outside of your residential household – it wants to make it relatively pain-free for everyone to transfer their profile to their own, paid membership.

Pain-free, except for the extra cost part.

In March, Netflix revealed that 100 million of its 220 million subscribers engaged in password sharing. It partially blamed its declining fortunes on the phenomenon, pointing to lost revenue opportunities.

In a blog post on its site, Netflix’s director of product innovation Chengyi Long said password sharing across multiple households impacted the company’s “ability to invest in great new TV and films for our members”.

Netflix has been trialling two different forms of password crackdown in Latin American markets including Costa Rica, Chile and the Dominican Republic.

One version involved charging members an extra fee to add to their account other households outside of their residence. The other version involved adding a home to an existing account.

The latter format meant Netflix memberships were locked to one physical location, which will be a hidden sting to subscribers with holiday homes.

While password sharing has always been a violation of Netflix’s terms and conditions, the company has never prioritised enforcing it while it was still aggressively growing.

That’s changed since its disastrous Q1 2022 financial results, which recorded its first subscriber loss in a decade, leading to a massive stock sell-off.

But what’s really going on is that promised and imminent password crackdown.

Subsequent financial results have put it on better footing, but its stock price of $US245 is still significantly down compared to the same time last year when it was trading for $US632.

The introduction of the profile transfer can only mean one thing – the password crackdown is still on track to be rolled out before the end of the year. So if you’re mooching off someone else’s logins, make the most of it while you can.

The password crackdown is one initiative the company announced it would do to combat its woes. The other is the heretofore unthinkable introduction of advertising on its platform.

Last week, Netflix revealed what an ad-supported tier will look like. In Australia, the “Basic with Ads” subscription package will cost $6.99 a month ($3 less than its current cheapest tier), with stream quality capped at 720p.

There will be an average of four to five minutes of ads per hour, which will play as pre-rolls and mid-rolls on movies and TV titles. There will also be some titles which will not available on the ad-supported tier due to licencing restrictions.

Microsoft was appointed as Netflix’s global advertising partner.

The ad-supported tier, which will be available from November 4, is designed to offer ad-tolerant and budget-conscious customers another option, especially as the cost-of-living crisis starts to bite around the world.

However, others might see a monthly discount of $3 as not enough of a trade-off to put up with pesky ads.

This article was first published by the NZ Herald and is republished here with permission.