When I first saw the Netflix Profiles pop-up I thought it was a trick: "Who's watching?" it asked. Eek! Not me! Sorry! I'd been using a friend's account for two years and thought my day of reckoning had arrived.
The site wasn't trying to fool me into revealing my transgression, but to set up a unique profile so my taste for Say Yes to the Dress won't pollute my paying friend's recommendation stream. The Netflix Profiles feature seemingly embraces the fact that an estimated 10 million people have been accessing the site through credentials shared with them by friends and family members.
Netflix now allows five unique user profiles per account, and up two of those users may stream content simultaneously from different devices. Sharing passwords to subscription services is illegal in some U.S. states, like Tennessee, but legal experts doubt that Netflix will go after account-sharing users in these states.
Aside from delighting users, Netflix Profiles preserves the integrity of the site's revered recommendation machine. The company's most valuable asset is that it has a really keen idea of who is watching what and what else. Netflix openly uses our viewing data to craft original series that people are crazy about, like House of Cards and Orange Is the New Black, and to recommend content that users are likely to watch and enjoy; approximately 75 percent of content viewed on Netflix was recommended to the viewer by the recommendation engine, according to an interview with Chief Product Officer Neil Hunt.
Having a cleaner data set about unique users' preferences will improve Netflix's ability to recommend appropriate content and win more of viewers' time and attention. The company's decision to acknowledge the sharing economy is as much about protecting their bread and butter as it is about making customers happy.
It remains to be seen whether other subscription services will follow suit. The Hulu Pluses and HBO GOs of the world will have to decide whether they value unique sign-ups and associated revenue over increased engagement from existing users (paying and otherwise) and a purer data set about their preferences. It will be fascinating to see whether these companies choose our money or our attention. The success of Facebook and Twitter prove that the latter, at critical mass, is powerful currency easily exchanged for dollars.
The sharing company I work for, Splitwise, is making a bet that subscription sharing will continue to rise, by explicitly catering to people splitting subscription costs/access. Splitwise is also a fairness company, so I'm compelled to ask: Is sharing subscriptions fair? Should we be happy that Netflix has legitimized account sharing, or upset at the 10 million people (myself included!) who think they're above paying for a service they frequently use?
Companies and people making awesome stuff for the web are consistently stymied by consumers' pervasive attitude that everything online should be free. It's possible that this development will weaken the subscription model, one of the only models working on the web right now.
What do you think?