Netflix has been struggling with declining user numbers for some time. The streaming service is now planning to take action – including advertising and curbing account sharing.
Subscribers are running away from Netflix. In the second quarter of the current fiscal year, the streaming giant recorded significantly fewer users – 970,000, to be precise. The causes include the intensified competitive pressure from more and more providers and high market penetration. Still, the company is “confident and optimistic about the future,” shareholders were told. One reason: Netflix is planning a series of measures to increase subscriber numbers and sales.
Netflix: Ad-financed subscription model already in 2023?
One building block is the launch of a lower-priced ad-supported version of the subscription in early 2023 “in a handful of markets” where advertising volume is high, according to a letter to shareholders. “Like most of our new initiatives, our intent is to roll them out, listen and learn, and iterate quickly to improve what’s on offer. So, in a few years, our advertising business will likely look very different than it did on day one.” Microsoft was brought on board as a technology and marketing partner.
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Account sharing should be curbed
In addition, Netflix wants to take massive action against account sharing – i.e. sharing access data, which is prohibited in the terms of use but has so far been tolerated by Netflix. The streaming provider estimates that over 100 million more households can be monetized in this way.
As early as March 2022, Netflix was testing an additional fee of three US dollars in Chile, Costa Rica, Peru and other South American countries that would allow users to share their accounts across households. From August, Netflix will only run on smart TVs in the markets mentioned in the markets mentioned. If the subscription is used for more than two weeks at a place outside of your own household, Netflix wants to block access on the corresponding device.
No restriction for use on smartphones and Co.
However, use on smartphones, tablets and notebooks should not be restricted. “Our goal is to find an easy-to-use paid sharing offering that we believe will work for our members and our business and that we can launch in 2023,” the company said in the letter.
“The widespread household account sharing today is undermining our long-term ability to invest in and improve our service,” says Chengyi Long, director of production innovation at Netflix, explaining the measures, which will be rolled out in other countries by October 2022 are to be introduced.
