Netflix struggles with subscriber losses
Netflix is extending its emphasis on charging people for account-sharing as it is looking for new ways to earn money after years of massive growth.
The streaming service said it will ask subscribers in five countries in Central and South America to pay an additional $ 2.99 (£ 2.50) a month to add a “second home” to their accounts.
And it warned that the password-sharing restriction would spread to the whole world.
The latest announcement was ahead of the results scheduled for Tuesday.
Earlier this year, the company announced its first subscriber drop in more than a decade. The company is expected to present an update of its members along with its results, in which it is to reveal the growing decline in subscribers.
This is a definite turnaround for a company that has seen seemingly unstoppable growth over the years as it has revolutionized the way people all over the world consume entertainment by shaking up traditional television and cinema business.
His position as a global juggernaut was cemented when the 2020 pandemic broke out, and people stuck at home with a few other entertainment options flocked to his shows.
However, as pre-pandemic habits return, Netflix tries to attract new registrations – and maintain the loyalty of existing members.
Price increases have prompted people in countries like the US and UK to cancel subscriptions, while many new competitors such as Disney, many of whom have been selling their movies and series to Netflix, are tempting viewers in the US and other countries to switch.
Research suggests that people are increasingly signing up to watch certain shows and then canceling their accounts.
It is unclear how families will react to the company’s request for more money for joint accounts.
In March, Netflix announced that it would charge households in certain countries, such as Chile, for adding an “additional member”.
The latest move, which will take effect from next month in Argentina, Honduras, Guatemala, El Salvador and the Dominican Republic, presents the proposal on slightly different terms, demanding $ 2.99 for each additional home.
People can edit their accounts at any time to remove homes.
Netflix said it expects to experiment with different ways of presenting charges before rolling them out worldwide later this year.
When things were going well Netflix could have afforded to ignore account sharing, but now it makes sense to try to eavesdrop on people sharing passwords, even risking alienating some, said Guy Bisson, executive director of Ampere Analysis.
“I think they will probably gain more from it than they would lose,” he said. “They can introduce it sequentially and gradually, making sure it is working as expected.”
In addition to trying to get more money from existing audiences by suppressing password sharing, Netflix said it would be experimenting with a cheaper ad-based service.
