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Analysts Predict Increased Revenue For Netflix as it Intensifies Crackdown on Password Sharing

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Analysts have predicted that video streaming platform Netflix could see more increase in revenue as it intensifies its crackdown on password sharing.

Analysts at Wells Fargo suggest that there are roughly 30 million shared Netflix accounts in the United States and Canada. They estimate that about 15% will pay to add another user to the existing account and roughly 25% will become a new subscriber. They further suggested a new revenue stream of $90 million to $2.5 billion.

Also, a global leader in financial services offering solutions J.P Morgan disclosed that Netflix’s password-sharing rule could lead to an increase in its stock price.

All these predictions of increased revenue for Netflix are coming after the video streaming platform has begun to roll out new guidelines internationally, limiting subscribers from being able to access their accounts from multiple households. Reports reveal that the new rules would be rolled out in the United States by the end of March.

Speaking at the company’s Fourth Quarter (Q4) financial report for 2022, Netflix co-CEO Greg Peters disclosed that the company’s crackdown on password sharing will not be a universally popular move. As such, Netflix expects to temporarily see numerous users close their accounts. He however believes those individuals will eventually return when a popular TV show is released.

Investors King understands that Netflix had reportedly aimed to implement this measure by the end of 2022. It however missed that deadline, but that hasn’t deterred it from proceeding with its plans to crack down on password sharing.

It is widely known that Netflix for a long time has allowed users to share passwords with family and friends which has cost the company a huge loss in revenue. According to Fortune, Netflix loses $6.25 billion in annual income because of password sharing. 

In a bid to crack down on password sharing to increase its revenue, in 2021, Netflix began to warn users about the need for them to create their account if they don’t live with the primary account holders. In its new move to crackdown on password sharing, Netflix will ask users to provide a primary location for all accounts within the same household.

Netflix will use IP addresses, device IDs, and device activity to determine if the device is within its primary location. If an account is consistently accessed outside of the primary location, it will likely be blocked.

To access an account on a device outside of the primary location, the account holder will receive an email with a four-digit code, which they will have 15 minutes to enter before it expires.

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Social Media

Behind Closed Doors: Microsoft’s Bid to Make Bing Apple’s Default Search Engine

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Insiders have disclosed that Microsoft Corp. engaged in discussions with Apple Inc. around 2020 about potentially selling its Bing search engine.

The proposed deal aimed to replace Google as the default search engine on Apple devices, particularly iPhones.

People familiar with the matter, who chose to remain anonymous, disclosed that high-level executives from Microsoft held exploratory talks with Eddy Cue, Apple’s services chief, responsible for the existing search engine partnership with Google.

Despite these discussions, the deal never progressed beyond preliminary stages. This revelation has gained renewed attention in light of the ongoing U.S. Department of Justice antitrust trial against Google, in which Apple and Microsoft are actively involved. The Justice Department is using Apple’s arrangement with Google as evidence of Google’s search market dominance.

Apple’s Eddy Cue defended the collaboration during his trial testimony, asserting that Google was the superior search option, emphasizing the quality of Google’s technology.

Apple’s partnership with Google, initiated in 2002, had grown to become highly lucrative, earning Apple between $4 billion to $7 billion annually by 2020.

This financial aspect, coupled with concerns about Bing’s competitiveness, played pivotal roles in Apple’s ultimate decision not to acquire Bing.

While Bing was briefly used as the default search engine in some Apple features between 2013 and 2017, including Siri and Spotlight, Google ultimately remained the preferred choice. In court, it was revealed that Microsoft had considered a multi-billion-dollar investment in its relationship with Apple in 2016, but this attempt was unsuccessful.

Eddy Cue’s testimony underscored Apple’s belief that Google’s search technology was unmatched, signaling that Apple had no plans to develop its own search tool.

This differs from Apple’s approach in other areas, where it competes directly with Google in mapping software, voice assistants, and operating systems.

In retrospect, Apple’s dalliance with Bing serves as a fascinating chapter in the tech giants’ intricate web of partnerships and rivalries.

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Technology

iPhone 15 Pro and Pro Max Owners Complain of Overheating Issues

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Some of the first owners of Apple Inc.’s latest offerings, the iPhone 15 Pro and Pro Max, are feeling the heat – literally.

Reports are pouring in from frustrated customers who claim that their new devices are prone to overheating during usage and charging, casting a shadow over Apple’s flagship product.

Complaints have flooded Apple forums and social media platforms, with users expressing concern over the device becoming uncomfortably warm while gaming, making phone calls, or using FaceTime.

The issue appears to be exacerbated when the phone is plugged in for charging.

Apple’s technical support staff have been inundated with calls on the matter and have been directing customers to an older support article on managing hot or cold iPhones.

This notice suggests that overheating may occur during intensive app use, charging, or initial device setup.

Apple, headquartered in Cupertino, California, has remained tight-lipped regarding these complaints, leaving users speculating about the root cause of the issue.

As the iPhone accounts for a substantial portion of Apple’s revenue, any product flaws are scrutinized intensely. While some problems can be resolved through software updates, others may fade with time. Apple usually subjects its products to rigorous testing to catch potential pitfalls before mass production.

The overheating issue could be related to the iPhone setup process, which can be processor-intensive, particularly when re-downloading apps and data from iCloud.

Users have also suggested that certain background apps, such as Instagram or Uber, might exacerbate the problem.

Videos of users measuring the phone’s temperature with thermometers have surfaced online, with one user reporting, “iPhone 15 Pro Max gets really hot easily.”

However, it’s not a universal problem, as some users have reported no issues or found that using a protective case mitigated the heat.

This development follows recent complaints about the FineWoven material used in iPhone 15 cases, highlighting potential quality concerns with Apple’s latest product offerings.

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E-commerce

TikTok Faces Regulatory Storm in Indonesia as Minister Calls for E-commerce Split

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Teten Masduki, the Indonesian Minister of Cooperatives and Small and Medium Enterprises, has emerged as a vocal critic of the Chinese-owned social media giant TikTok.

Masduki’s relentless complaints about TikTok’s dominance in the Indonesian e-commerce market have set the stage for a seismic regulatory shift that could have far-reaching consequences.

Masduki, a former activist who once took on government corruption, has been disrupting official meetings to raise concerns about TikTok’s impact on local players. This groundswell of criticism has culminated in sweeping regulations that force TikTok to split payments from shopping in Indonesia, a move seen as a significant blow to TikTok’s e-commerce aspirations.

Under these new rules, social media companies in Indonesia are barred from handling direct payments for online purchases, effectively requiring TikTok to either create a separate app for payments or risk being shuttered in Indonesia entirely.

The regulations, stricter than anticipated, have already had a chilling effect on the e-commerce market, benefiting local champions like GoTo and Sea.

While TikTok has pushed back, arguing that the separation of social media and e-commerce hampers innovation, the Indonesian government remains firm in its stance, aiming to protect smaller enterprises and voters as elections loom on the horizon.

This clash underscores the challenges TikTok faces in its pursuit of e-commerce dominance and sets a precedent for other countries in the region. As TikTok’s meteoric rise in regional e-commerce continues, governments are increasingly assessing whether the platform benefits or harms domestic merchants.

For TikTok, the challenge lies in finding a solution that appeases authorities while allowing it to continue its growth. The repercussions of this battle in Indonesia could reverberate throughout Southeast Asia and beyond, shaping the future of social media-driven e-commerce.

In a rapidly evolving digital landscape, Teten Masduki’s bold stance against TikTok may just be the opening salvo in a much larger struggle for control of the e-commerce arena.

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