• Paid sharing will be rolled out in more regions including the US this quarter.
• This news comes alongside news that Netflix has upgraded its ad-supported tier to 1080p quality with up to two concurrent streams.
• Netflix has said it’s decisions for membership tiers are driven by consumer choice and long-term revenue goals.

Paid sharing is a win for Netflix. So much so that the firm is getting ready to roll the feature out more widely in the coming months.

This is according to Netflix’s first earnings call for the year which highlighted how, despite an initial exodus from users, paid sharing leads to more members and higher revenue after a while.

“In Q1, we launched paid sharing in four countries and are pleased with the results. We are planning a broad rollout, including in the US, in Q2,” the streaming giant told shareholders.

That means that the launch of paid sharing in more markets is imminent given that we are currently in Q2.

Why then, if paid sharing is so successful, is Netflix being so tentative about its rollout? To put it simply – choice.

Netflix recognises that pushing users who had previously borrowed an account to pay for an account is a hard ask. This is especially true for families who may be sharing an account with a child away at university or any other situation that warrants sharing an account.

As such, the firm is exploring a range of different membership options.

“We want to be more sophisticated around pricing so that we offer a range of price points and feature sets to suit consumers’ differing needs. For example, when we launched globally in 2016, we took a fairly uniform approach to pricing across most countries given our focus on early adopters,” said the firm.

In an earnings call, co-chief executive officer Greg Peters said that the pillars driving the evolution of its pricing tiers are consumer choice and optimising long-term revenue for Netflix.

“We’ve upgraded the ads plan features both in terms of video resolution or video quality and number of concurrent streams because we think it supports both of those goals,” said Peters.

Those upgrades Peters mentions include an increase in resolution from 720p to 1080p and the ability to have two concurrent streams. These will be made available in Canada and Spain today with a wider rollout to all 12 markets where paid streaming is available.

We suspect that the existing tiers, Basic, Standard, and Premium will remain but expect to see other options in future as Netflix tries to appeal to more users.

Paid streaming then has not been a failed experiment and the firm is ready to push forward with plans to end those borrowing accounts from others

So what’s the goal here?

Well, it appears as if Netflix wants to capture the entire broadband market. The firm’s chief financial officer Spencer Neumann, lamented the fact that “there are one billion plus broadband households with roughly 450 – 500 million of those being connected TV households and we only have 230 million-ish paying members today. So that’s why we’re so focused on addressing with paid sharing and then just making our business and the value that we bring to the service better each day to bring in more members.”

We’re not sure whether Neumann believes that Netflix can secure every single broadband user as a customer. It’s a lofty ambition to be sure but is it attainable?

We’re not so sure given how many streaming platforms there are. The fact of the matter is that Netflix needs to be realistic to its shareholders about how much growth there really is to be had in this market. It cannot be that shareholders expect constant growth until all eight billion humans are Netflix subscribers. That sort of growth is simply unrealistic for a luxury product.

The next few quarters will prove interesting for Netflix as it rolls out paid sharing and we will be eagerly watching to see if markets do indeed cancel before returning or if subscribers simply cancel.

We foresee the high seas becoming very busy, very soon.