Netflix spent years encouraging password sharing and cheap subscriptions, then racked up $15 billion in debt chasing original shows. When subscriber growth stalled, they cracked down on sharing, doubled prices, and finally started growing again.
Netflix dug themselves out of a $15 billion hole by ignoring people who were stealing from them. How did they do it? Remember this? Yeah, in the early days, Netflix wanted you to share your account with your friends and family.
The CEO of Netflix has said he doesn't consider password sharing a big problem as long as the user base keeps growing.
And they had all of your favorite shows: Friends, The Office, How I Met Your Mother. Plus, their subscription price? Rock bottom at $8. Then they branched out to making original content, shows like Stranger Things, House of Cards, Bridgerton, gaining them hundreds of millions of subscribers. But creating that original content, it's so expensive to make that they're nearly $15 billion in debt. Say they look at their subscriber numbers and they realize those numbers are artificially low. If every account is shared by 3 or 4 people, they're losing billions of dollars every year. So they crack down on people doing account sharing, realizing that a big growth lever was actually right under their noses the whole time. Forcing new users into subscriptions, and they double the price. And after years of stagnant growth, Netflix starts growing again.
