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Netflix may change policies to prevent customers from sharing accounts

Published Apr 22nd, 2013 10:45PM EDT

For a monthly fee of $7.99, Netflix customers have access to a wide variety of TV shows, movies and original content. More often than not, however, users frequently share accounts between family members and friends due to the company’s relaxed policies. Michael Pachter of Wedbush Securities believes chief executive Reed Hastings should try to squeeze more profit from his 33.3 million customers by “cracking down on piracy” or even raising prices. The analyst claims that as many as 10 million people are accessing the service without paying, which is ultimately hurting Netflix’s potential revenue.

The company’s current policy limits a single account from streaming more than two videos simultaneously, however it does not limit the number of devices — including computers, gaming consoles, smartphones and tablets — an account can be active on.

“It’s time to change,” Pachter said in an interview with Bloomberg. “They can say they’re cracking down on piracy. They can appeal to fairness.”

Netflix on Monday announced a new family plan that will be offered for $11.99 per month later this year. The plan is aimed at those individuals who share their accounts with other family members and are hampered by the company’s simultaneous streaming limit. Hastings revealed that the new plan, which was previously rumored to include individual queues and personalized recommendations, will allow for content to be streamed by up to four people simultaneously.

Pachter believes Netflix must do more, though.

The analyst said the company should also start to limit the number of people or computers attached to a single account, or shift away from its current pricing model. The service could charge extra for access to kids’ programming, or perhaps a $3 fee for users that want to register their account on more devices.

Hastings has previously said that Netflix has no plans to change its current low-end pricing, however, especially after the customer revolt that took place in 2011.