> This is yet another category of business where I think they'd be far better off being private, so in theory there isn't constant pressure to continue increasing revenue.
Netflix has borrowed billions (and billions) of dollars to get where they are. As a private entity they've gone bust seven or eight years ago.
Netflix priced themselves artificially low to grow, based on debt. That set unrealistic consumer expectations and they might have to face the consequences of that eventually, but Netflix's terms literally always said that accounts could only be shared with people living in the same household as you.
Right, but at the same time, Netflix also prices their product tiers around being able to pay for more simultaneous streams on the same account. Account sharing is literally a selling point for them.
Ok so, what if I live with you but work in another city I travel to every week, do I not live with you? What if I'm a trucker on the move? What if I'm in the army and getting deployed?
Hastings once said that someone going to college sharing their credentials with their family at home is fine by him.
Let's apply some common sense, right. If you're a trucker sharing your account with your spouse at home is probably fine. Sharing your account with two dozen trucker buddies and fifteen cousins probably isn't.
In those 3 examples you’d still both file your taxes at the same address and be legally eligible to vote there too.
Seems easily distinguished from the case of independent adults who sleep in different homes every night and have separate addresses on all their tax forms, drivers’ license and voting registrations...
So is Netflix going to require tax information on everyone in the household? How can they tell the difference from their end I think is one of the questions being presented
Netflix doesn't seem to be cutting anyone off here.
They're just forcing 2FA on accounts that meet some kind of threshold of "suspicious" behaviour. There's likely a lot of metrics being used to identify that.
Seems like they aren’t asking for anything in particular for identity verification but just creating a slight annoyance via asking to re-verify.
Facebook does prompt people to upload Photo IDs sometimes but I doubt Netflix wants to get that invasive.
(I had interpreted the question as related to how to interpret the T&C. Agree that ultimately, it’s impossible to enforce the existing T&Cs to the exact letter, although some combination of annoyances and mild shamings might affect user behavior and presumably this is what they are testing.)
Presumably, this person that is on the move is still using the same device no matter where they go. Their login session will be the same, just coming from a different IP.
>Netflix has borrowed billions (and billions) of dollars to get where they are. As a private entity they've gone bust seven or eight years ago.
Netflix has been profitable since at least 2005... they may not have grown as quickly, but I'd need some data to back up the claim they'd be bankrupt without billions in investment.
>but Netflix's terms literally always said that accounts could only be shared with people living in the same household as you.
I never said anything to the contrary. But it's no secret to netflix or anyone else that account sharing happens. This wouldn't be a news story otherwise. It also doesn't change the fact it's customer hostile and clearly an attempt to increase revenue.
Netflix would not remotely resemble its current form and likely would have been acquired years ago if they did not pivot to their own content. Switching to their own content required and still requires huge amounts of money; est. 17bn last year[0]. Additionally, the gross profit number is a flawed number for many reasons; try looking at operating or net income or anything farther down the income statement from basic revenue. Netflix has no option but to finance content spend with debt as they do not generate enough FCF to cover content spend and will quickly fall behind competitors if they don't.
>Netflix would not remotely resemble its current form and likely would have been acquired years ago if they did not pivot to their own content.
You can't acquire a private company unless they're willing to sell.
>Switching to their own content required and still requires huge amounts of money; est. 17bn last year[0].
I don't follow your point? Private companies can take a loan just as easily as public. If they were unable to attain the financing they wanted, they'd still have plenty of their own content, just not as much.
>Additionally, the gross profit number is a flawed number for many reasons; try looking at operating or net income or anything farther down the income statement from basic revenue. Netflix has no option but to finance content spend with debt as they do not generate enough FCF to cover content spend and will quickly fall behind competitors if they don't.
I'd suggest you do the same. Their cash balance increased from $5 billion to $8 billion last year. They took out "debt" to finance their movies because money is cheap right now. Nothing they've done required them being a public company, and nothing you've shown makes me believe they couldn't be in exactly the same position they currently are as a private company. They didn't even start borrowing money of significance until 2012, I still don't believe for a second they'd be "bankrupt" as a a private company.
> I don't follow your point? Private companies can take a loan just as easily as public. If they were unable to attain the financing they wanted, they'd still have plenty of their own content, just not as much.
Private companies face a higher cost of capital than equivalent public companies and are unable to borrow as much money as public companies are able to. This is basic finance 101 stuff. Without debt financing, they would not have been able to begin their pivot when they needed to. Netflix is able to borrow at much lower rates than a company with the same financials solely because they are a large public company. Google "equity cushion" if you're unfamiliar with the term.
> I'd suggest you do the same. Their cash balance increased from $5 billion to $8 billion last year. They took out "debt" to finance their movies because money is cheap right now. Nothing they've done required them being a public company, and nothing you've shown makes me believe they couldn't be in exactly the same position they currently are as a private company.
Yes, Netflix is doing much better financially over the past few years and especially in the past year given the pandemic. I don't see how their cash balance is relevant in the face of content spend 2-3x that much. The initial contention was over content spend and a misleading gross profit number.
>They didn't even start borrowing money of significance until 2012, I still don't believe for a second they'd be "bankrupt" as a a private company.
They started borrowing when they needed to pivot to their own content, had to do so at pretty high rates, and luckily succeeded in their pivot.
Throughout this, I don't see any acknowledgement of where streaming was back then and how competitive the space has become since then. Netflix needs to spend on content or it will get left behind. A smaller Netflix offers no competitive edge right now and a smaller Netflix years ago would have been held hostage by content owners while being unable to have any real control over sub pricing; see poorly handled rate increases years ago.
>Private companies face a higher cost of capital than equivalent public companies and are unable to borrow as much money as public companies are able to. This is basic finance 101 stuff. Without debt financing, they would not have been able to begin their pivot when they needed to. Netflix is able to borrow at much lower rates than a company with the same financials solely because they are a large public company. Google "equity cushion" if you're unfamiliar with the term.
I guess I took a different finance 101 than you did - it was at an accredited university though, so I'm fairly certain they weren't making things up as we went. I've literally never heard of a public company being able to borrow more because they were public. Quite the opposite actually, as a private company with a solid financial track record isn't subject to the whims of shareholders and short-term quarterly-returns based internal investment.
Now if you're pets.com that is burning through cash like it's water in the hopes of making money 20 years down the road... that's a different story. That's also not Netflix.
Private companies face a higher cost of capital than equivalent public companies
Why is that? (Sorry, I never took finance 101.) Is it because public companies can more easily put up corporate ownership as collateral for the loan? Or because of the extra scrutiny they get from the SEC?
> Netflix has been profitable since at least 2005..
Only because you're allowed to not count issuing junk bonds towards your profitability. Netflix only started having cash positive quarters this year, and has fifteen billion dollars in debt, generally going up by four billion dollars a year.
Netflix literally could not have afforded the interest on those junk bonds as a private company. It was only able to borrow so cheaply on the promise of it's growth.
(And this year is unusually friendly to them due to Covid, I do not think they are suddenly actually profitable, they just didn't spend nearly as much as normal.)
Netflix has borrowed billions (and billions) of dollars to get where they are. As a private entity they've gone bust seven or eight years ago.
Netflix priced themselves artificially low to grow, based on debt. That set unrealistic consumer expectations and they might have to face the consequences of that eventually, but Netflix's terms literally always said that accounts could only be shared with people living in the same household as you.