Millennials like Netflix, but free is better

In a recent survey of US college students, commissioned by LendEDU, a consumer finance comparison site, only 8% of respondents said they didn’t have a Netflix account. That means that a whopping 92% have Netflix. Additionally, 5% said they used their current or ex-girlfriend’s or boyfriend’s account. Meanwhile, only 34% said they have their own account.
“Netflix continues to be the clear leader in online streaming, but is hurting in one key performance metric,” the report said. Netflix is also the most popular video platform among teens, beating out both YouTube and cable TV in a recent Piper Jaffray survey.

It might be more than bad manners to share accounts. Last year, the U.S. 9th Circuit Court of Appeals ruled that sharing online passwords is a crime prosecutable under the Computer Fraud and Abuse Act. “The majority does not provide, nor do I see, a workable line which separates the consensual password sharing in this case from the consensual password sharing of millions of legitimate account holders,” Judge Stephen Reinhardt wrote in his argument.

The most important takeaway seems to be that Netflix is losing millions of would-be customers to account sharing, and you might think the company would want to discourage the practice. Surprisingly, Netflix is on record as supporting the sharing of passwords and accounts, at least among family members.

But Netflix chief executive Reed Hasting has said sharers (or, as some people say, cheaters) often go on to become paying customers. “We love people sharing Netflix,” he told the Consumer Electronics Show in Las Vegas last year. “That’s a positive thing, not a negative thing.” 

Other data points confirm the popularity of Netflix among this growing demographic. In its 2017 Brand Intimacy Report, brand agency MBLM reveals that the most successful brands are those that build a strong emotional bond with their customers. The survey found that Netflix was one of the top five most beloved brands by consumers, and it’s in the top three among millennials, which bodes well for customer retention.

When taken together, however, the results of these surveys point to continuing popularity and greater adoption of Netflix by younger viewers. Those who have grown up with the streaming service will probably join the ranks of paying subscribers as they become independent. Since millennials now outnumber baby boomers as the largest generation,  the youngest of these represents a largely untapped opportunity that Netflix has yet to exploit.

On Tuesday, the company said it made $2.64 billion in revenue in the first quarter and earned a profit of 40 cents per share. Netflix said it added 5.2 million new paid streaming subscribers in the most recent quarter; it now has 94.3 million globally.