An interview from the Innovation Insiders podcast discussing how Netflix approached widespread password sharing during and after the COVID-19 pandemic. The speaker explains why Netflix initially tolerated sharing (user growth and empathy during the pandemic), then researched regional differences in sharing behavior, designed multiple targeted solutions rather than a single fix, phased the rollout to let the market and members adapt, and ultimately turned the initiative into a business win (including a positive stock reaction).
Chapters
Could you, could you share some insights on how you've approached solving a problem and then the impact it had and maybe diving a little deeper on this specific case of the password sharing initiative?
Yes. So of course I'll go as like, as deep as I can on that. Certain parts I don't go too deep in on, but I think it just comes down to the point where prior to the pandemic, there was, and even during the pandemic, there was so much Netflix password sharing going on. And we understood that. We knew that Netflix was one of the stronger powerful empathetic tools that got us through the pandemic. So it wasn't about just stopping Password Sharing in 2020 and trying to come up off everybody and make all that money. It was more of, maybe it's smarter for us to not really push back on the password sharing right now because we're getting a lot of users from it. We're going through a pandemic, the world needs it. But we knew that there was at a point there was so many people sharing their password that it was almost more than people that were paying. So there came a time, just as a business with business goals and stockholders and stakeholders that you have to solve that problem. It was a problem. I mean, maybe it was a positive for a lot of our members, but at a certain point, like it went from a benefit for us getting users to now a problem. So like I said before, you don't just stop everybody with the flip of a switch. You now got to do the research to really learn to understand why people sharing. People in the United States share for different reasons than people in Europe. People in Europe share for different reasons than people in Asia. So you want to have a clear understanding of why people are sharing, where they're sharing, how much they're sharing, and then you can really start to try to attack the problem. And the reasons were different all across the board. So there was not going to be one size fits all answer. And we knew that. So that's why we ended up rolling out a lot of different solutions to help with, with the password sharing. So it wasn't just one, one answer. And all of those different things allowed us to solve for each use case or most of the popular use cases that people were sharing for. So it gave them all like an alternative, which allowed them to still be happy with the platform, which is why you were able to see us turn that into a win for the company. Because once we started to roll it out, our customers were already aware of it. The media had already kind of exposed it earlier. Everybody got mad, and then they kind of got over it after. We took our time to get the solution right. So by the time we really did rol to the public, people were already receptive of it. The content was still good. So therefore people wasn't really as bothered as we thought they would be after we rolled it out. So at first it was a very, very tricky situation that we got a lot of pushback for. But we worked so hard to keep listening to people and coming up with solutions that by the time we rolled it out, it was a great solution. The market was very receptive of it. So are our members. And that's why you saw the stock price go up.
