Netflix just raised the price for its standard plan in the U.S. in a move that could be related to the excessive sharing of passwords.
The standard plan is the most popular option when it comes to Netflix subscriptions, as it allows for two viewers to use the service at the same time. This is the only plan tho get a price hike, jumping from $8.99 to $9.99 per month.
Netflix said that this price increase will enable the service to provide more content, both licensed and original, but Goldman Sachs has a different theory. According to a new analyst note, Goldman Sachs believes that Netflix spiked the price of its standard plan because too many users were sharing their accounts, Business Insider (BI) reports.
The $1 price hike reportedly aims to "reduce excessive password sharing by incentivizing users to switch to the one-screen plan," in addition to "encouraging households with multiple users to upgrade to the four-screen plan."
In other words, Goldman Sachs theorizes that the two-stream plan is the most convenient one for sharing passwords, but pushing users to the one-screen or four-screen plans could significantly reduce the issue. Users on a one-screen plan would be far less likely to share their password, because they wouldn't be able to use the service themselves if someone else were using it. At the same time, those on four-screen plans pay heftier fees that would make them think twice about giving away their password for free.
With the two-screen plan, too, many people shared their passwords because the monthly rate was accessible and sharing was not an issue as long as there were never more than two people using the service at the same time. That's why the standard two-screen plan is the only one to get a price increase, according to Goldman Sachs.
At the same time, the four-screen plan now seems more accessible than the standard two-screen one, as it costs $11.99 versus the new $9.99 price of the standard plan. This, in turn, could convince more families to shift to the higher plan.
The new price increase for the standard Netflix plan applies to new customers in the U.S., Canada and North America, following a similar move in Europe in late August. The new price is effective immediately for new customers, but existing subscribers have a grace period of one year.
