Netflix is considering making more changes to its service to minimise password sharing and create a low-cost subscription subsidised by advertising.
The changes were announced late on Tuesday (April 19th), and the company hopes that it will help Netflix get back to where it was at the height of lockdown when millions of people were locked up at home, as things have changed markedly for the company. Now, with the advent of wealthy rivals such as Disney and Apple, Netflix’s once held monopoly over the streaming market is waning.
Notably, Netflix’s customer base fell by 200,000 subscribers during the January-March quarter of this year, the first contraction it has witnessed since it became available to most of the world six years ago. The drop is also attributed to the service pulling out of Russia following its invasion of Ukraine, which saw them lose 700,000 subscribers. There is also the potential for things getting worse, with the company projecting a loss of a further 2 million subscribers during this quarter, April-June.
The California company has estimated that around 100 million households are watching its service for free by borrowing the account of friends or family members, which is why they’re taking this new step. Netflix CEO Reed Hastings explained: “We’ve just got to get paid at some degree for them.”
In order to get more payment for its service, Netflix has suggested it will expand a trial program it’s currently running in Chile, Costa Rica and Peru.
In these three countries, subscribers can give another household access for a discounted price. In Costa Rica, Netflix prices range from $9 to $15 per month, depending on the plan, and subscribers can share their service with another household for an extra $3.
Netflix has given no further information about how the cheaper, ad-supported service would work, or how much it would cost. One thing is clear, though. Whilst the move might be good for the company, they risk alienating customers, and it is certain that many will cancel their subscriptions because of the changes.
This is a developing story.
Watch the trailer for Netflix’s Stranger Things 4 below.