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A week after Netflix announced a loss of subscribers for the first time in a decade, the company has begun to consider new measures which include a global campaign against password sharing and resorting to the implementation of advertising.
The global streaming giant ended the first three months of the year with 200,000 less subscribers. Netflix, which currently has 700.6 million users, experienced record growth in demand in the early days of the pandemic, when people around the world were stuck at home and flocking to their screens to watch shows and movies.
But password sharing and stiff competition from other streaming platforms have made it difficult for Netflix to attract new viewers .
This is what viewers can look forward to in the future, in an attempt to the platform to increase subscribers and stop the loss of income:
A measure against the sharing of passwords
According to Netflix estimates, there are more than 100 million homes that use Netflix, but they do not pay for the services.
Netflix admitted that it allowed users to share their passwords because it got more people hooked on their platform. However, the launch of other streaming services has made it much more difficult for the company to grow its membership base.
Last month , Netflix started testing ways to make users in Chile, Costa Rica and Peru, who share passwords, pay a fee for additional members.
This model could be expanded to other countries, although it has not been detailed when these changes would be implemented.
Cheap service, but with advertising
Netflix co-founder Reed Hastings has long resisted endorsing the ads, but the company changed course on Tuesday.
“I have been against the complexity of advertising (…) But I’m a bigger fan of consumer choice. And allow consumers who would like to have a lower price and tolerate advertising to get what they they want makes a lot of sense,” he said last Tuesday.
The move to ads was greeted with skepticism by some Wall Street analysts, including Rich Greenfield, Media and Technology Partner and Analyst at LightShed Partners. He told NBC News that adding ads would likely result in less viewing time per user per day and ultimately
, in a higher user turnover.
Decrease investment in new content
To further boost revenue growth, Netflix said it would also could withdraw spending on your movies and TV shows.
“We are reducing part of the growth of our spending both in content and in spending without content,” Chief Financial Officer Spencer Neumann said in a recorded interview.
With $17,000 million dollars annually, Netflix currently spends more on content than any of its competitors, Greenfield pointed out.
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