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Netflix stops charging customers who never watch

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Re: Netflix stops charging customers who never watch

#61

What happens with your subscriptions when you die?

A few scummy companies put huuuge termination fees in the case of a customer's death. In one case it was equivalent to 100 years service for a phone setup my grandfather had! In most cases I bet they get paid - usually whoever is overseeing a loved ones estate really doesn't want to be going to court etc.

This sounds insane, do you have some examples?

Re: Netflix stops charging customers who never watch

#62
post #26

Earlier quoted context omitted.

A good way to rank the level of scumminess among SV companies: Signup with a credit card and don't validate your email address or ever sign into your account. You'd be amazed how many companies will happily start charging you.

How is that scummy? You bought something, and they're charging you for it.

I should clarify. You sign up for a free trial and never log in and never confirm your account. Scum kings will still begin charging you after your free trial ends.

Re: Netflix stops charging customers who never watch

#63
post #26

Earlier quoted context omitted.

A good way to rank the level of scumminess among SV companies: Signup with a credit card and don't validate your email address or ever sign into your account. You'd be amazed how many companies will happily start charging you.

How is that scummy? You bought something, and they're charging you for it.

How can you cancel (without cc chargebacks) if you typed in the wrong email address?

Re: Netflix stops charging customers who never watch

#64
post #12

I always wonder when a company does this if it is completely altruistic or if something else is going on behind the scenes. Maybe notifying customers gets them to reactivate, maybe if they resubscribe later they can charge more, maybe it’s better for financial reporting and projecting subscriber counts. On the other hand it could just be a rare moment of a company doing right by the customer.

This is definitely the right thing to do.

The move is also brilliant in two ways: 1. More Netflixsters will realize now and start watching again. 2. Netflix is getting a lot of free publicity.

The Combined value of these two is worth far more to Netflix than whatever pennies in revenue they’ll lose.

Re: Netflix stops charging customers who never watch

#65

Years ago, I heard of a dating site doing the opposite of this. They normally sent periodic digests and newsletters to their users to try to increase engagement, but if a user went a certain number of months without logging into their account, but still allowed monthly fees to be charged, they were labeled as a “sleeping giant” in the database. Once in this state, they would not be contacted by the site for any reaso…

I’m quite sure hellosign does this as well. I did not receive a single email from them for two years, but they charged me $140 two times. I never used their paid offering. The second year, I never even logged in. I received no marketing emails, no “you’re about to be billed” emails, no “we received your payment” emails. It seems wrong.

Re: Netflix stops charging customers who never watch

#66
post #12

I always wonder when a company does this if it is completely altruistic or if something else is going on behind the scenes. Maybe notifying customers gets them to reactivate, maybe if they resubscribe later they can charge more, maybe it’s better for financial reporting and projecting subscriber counts. On the other hand it could just be a rare moment of a company doing right by the customer.

We do this at my company, and it is purely for altruistic reasons. If people aren't happily making good use of my service, I don't want their money. That's the entire calculus. Netflix is vastly bigger, granted, so who knows what machinations are afoot for them. But it is certainly believable to me that a company could choose to do something explicitly anti-greedy.

If someone is giving you their money, how do you know they don't want to use your service?

Many people give money to ensure that a service is available when they need it.

Re: Netflix stops charging customers who never watch

#67
post #48

Earlier quoted context omitted.

Really the only valid reason to do this is that the goodwill will help them make more money in the future. Strictly losing money with no upside in the future is in violation of the "duty of loyalty" that all corporate officers have toward shareholders.

> Strictly losing money with no upside in the future is in violation of the "duty of loyalty" that all corporate officers have toward shareholders. I'm pretty sure that's just the absurd HN take on the "duty of loyalty", not an actual fact. Also, if you absolutely need a pessimistic reason, I imagine it would avoid headaches with customers complaining (regardless of who's right).

This. If someone is paying for your service and not using it, perhaps they have an inaccurate idea of what your service (and their payments) actually entail. If that's the case, then you have a customer who's going to come to you eventually to figure out what the hell they've been paying you for all this time, and/or in need of a particularly expensive crash training course (because it's coming out of nowhere). Better to drop them and then onboard them again as new customers (which, functionally, they would be) if they decide to come back.

There ARE industries that survive on the, "One loud sign-up multiple silent payment extractions," model; everyone hates them and they have to ju~st skirt regulations to get by ("I'm sorry, we didn't receive your cancellation, please fax it with proof of necessity, last month's payment is still due.").

Re: Netflix stops charging customers who never watch

#68

A reasonable strategy would be to stop charging customers who haven't watched in a while, but leave them enrolled as subscribers. If they start watching again, start charging again.

Netflix keeps all your preferences and history, so the account can be reactivated without losing anything.

I wonder if it is different if you were never a paying user? I did the free trial in February 2019 and then cancelled. If I try to login now, it starts going through the whole set up a free trial for a new user process, with no indication that it recognizes my account.

In fact, if I try to login with the email address I used for the trial and any random thing for the password, it goes to the new user trial setup.

If I hit thee "need help" link on the sign in screen and try to initiate a password reset, it tells me there is no account for my email address.

Re: Netflix stops charging customers who never watch

#69
post #12

I always wonder when a company does this if it is completely altruistic or if something else is going on behind the scenes. Maybe notifying customers gets them to reactivate, maybe if they resubscribe later they can charge more, maybe it’s better for financial reporting and projecting subscriber counts. On the other hand it could just be a rare moment of a company doing right by the customer.

I'm guessing that "if you stop watching, we stop billing" helps a lot in getting users to sign up for a trial with their credit card. Not sure if it's been tested, but it does seem like a reassurance that might go a long way.

Re: Netflix stops charging customers who never watch

#70
post #12

I always wonder when a company does this if it is completely altruistic or if something else is going on behind the scenes. Maybe notifying customers gets them to reactivate, maybe if they resubscribe later they can charge more, maybe it’s better for financial reporting and projecting subscriber counts. On the other hand it could just be a rare moment of a company doing right by the customer.

At some point the cost-benefit calculus has to flip. Users on the extreme right-tail of the months-paid-but-unused distribution are a negligible amount of revenue but very likely to complain when they noticed they’ve paid for years of unused service. If the company refunds these users as a matter of policy, it creates uncertainty in the accounting and negates the value of them being allowed to keep paying. If no such policy exists, it creates a reputation risk: “YoungPersonApp bilks $2000 from grandma with Alzheimer’s”

“Doing the right thing” and “managing reputation risk” are often indistinguishable. The details of Machiavellian self-interest can be difficult to codify, so a semi-sincere effort to do the right thing can be safer.

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