Netflix is now in a precarious position. Netflix has lost 200,000 customers in the first quarter of 2022, the first time the streaming service has had a decline in subscribers in over a decade, according to financial results released by the company. Despite the loss of 700,000 customers in Russia, Netflix expects to lose 2 million subscribers by the end of July.
Is this big flight of subscribers due to a variety of factors? The most prominent example is Netflix’s latest (again) price rise, which occurred amid a time of high inflation. That’s caused a lot of individuals to leave, and it’s not hard to understand why. A significant factor is a scarcity of quality material in the face of fierce competition in the streaming industry.
Netflix seems to have a distinct perspective, at least on the surface. However, instead of looking into why individuals are leaving, Netflix appears to believe that account sharers are the true criminals. More than 100 million households are reportedly utilising someone else’s Netflix account instead of paying for their own.
A similar situation has occurred before. Because they were concerned about people using their accounts when they were away from home, Netflix implemented a poorly-thought-out authentication method last year. As of late, Netflix has been testing a scheme that would charge account sharers in Chile, Costa Rica and Peru an additional $3 per month.
With Netflix now asserting that there is a “huge short-to-midterm potential” to monetize account sharing, the idea is to try to get more money out of consumers.
More than 221 million individuals across the globe are paying Netflix members, which means that almost a third of those people don’t really pay Netflix for access. It’s easy to see money signs in those numbers if you’re sitting in a business boardroom. Netflix does not charge account sharers additional fees for the option of dividing the cost of a subscription with another person.
Is enforcing a ban on account sharing going to help?
Is it really going to encourage individuals to sign up for their own Netflix accounts if they have to pay a fee for the pleasure of doing so?
By going after those who are staying, Netflix is avoiding the problems that are causing consumers to stop watching its content.
Netflix admittedly bears some responsibility for the current state of affairs. Multiple users may be accommodated by the streamer, but it insists that this was done to make life simpler for individuals living in the same home. According to Netflix, account sharing is beneficial to the company’s expansion since it allows more users to access the service’s library.
A glaring error is to assume that everyone who shares Netflix accounts is prepared to pay full price for the service if that loophole is closed off. If you’re not a Netflix subscriber, you have the option of setting up your own account and paying the full amount straight away. There are two possible reasons for this: either they are protesting the fact that they have to pay for Netflix, or they don’t like what Netflix has to offer.
My brother and I were able to divide the cost of a Netflix membership in 2013, so that’s why I signed up for it. At some point in the future, my father came around to the notion of streaming, and we upgraded our subscription to the most costly tier that enabled us all to watch at the same time.
After the initial wave of huge cancellations, I finally gave up on Netflix some years later. It took the cancellation of The Santa Clarita Diet for me to make the decision that it was not worth my money to work with a corporation that would so carelessly cancel projects. Netflix hasn’t altered its tune in the last three years, as seen by the apparently weekly cancellation of well-received programmes.
Netflix is still available to me, thanks to my girlfriend’s scrounging of a free subscription via her job. However, I don’t watch it very often since I can’t find much of interest to watch on television. Investing my time and energy into a programme that is likely to be cancelled in the next year or so feels like a waste.
I wouldn’t bother with Netflix if there was no account sharing, and given the current state of affairs, I doubt I would miss it.
It’s reasonable to assume that Netflix will run advertisements in the near future.
According to a report from Netflix’s corporate headquarters, the business may finally give in and provide a lower-cost membership supported by advertising. Despite Reed Hastings’ declaration that the firm is “open” to introducing a lower-priced tier with commercials, there has been no official announcement of any such intentions.
Hulu, Peacock, HBO Max, and Paramount Plus are just a few of the streaming providers that have embraced this concept. There is nothing more to it than that: your monthly expenditures are reduced, but you still have access to the same inventory. At some time, you’ll have to sit through a commercial.
Giving customers the option to reduce their monthly payment in exchange for watching ads makes reasonable.
Netflix’s CEO, Reed Hastings, has previously stated his opposition to the idea of introducing “the complication of advertising” to the service. However, the co-CEO confessed that he favoured a subscription model that offered more options to the customers. There is a lot of logic in allowing customers who want to pay less and are advertising-addicted to do so.
It’s my opinion that paying for a service doesn’t imply that I have to put up with advertising. The dashboard would show adverts even if I had an active membership to Xbox Live Gold back when it was available on the Xbox 360, and it was one of my pet peeves. Even though Microsoft never promised that Xbox Live would be ad-free, I was annoyed by it.
Recently, I saw first-hand how freeing it can be to eliminate advertisements from streaming content. All 4, the ad-heavy on-demand service, is well-known in the United Kingdom. There are some really dreadful commercials as well, such as the obnoxious yodelling Domino’s advertisement that went under everyone’s skin.
For free usage, All 4 is bombarded with advertisements. Parent company Channel 4 is a business, after all, and it produces money in this way. Nonetheless, after reaching my breaking point, I decided to give its ad-free All 4 Plus subscription a try. There is a monthly fee of £4 ($5.21) for this service, which seemed acceptable to me.
My three-month anniversary of utilising All 4 Plus is fast approaching, and I have no regrets. As it turns out, saving £4 a month is a bargain if it means being able to watch all of the current episodes of Four in a Bed without being interrupted.
That doesn’t mean I don’t agree with Hastings’ views on advertising. Giving customers the option to reduce their monthly payment in exchange for watching ads makes reasonable. Ads on Netflix would not be an option for me, I’m certain of that.
As the cost of living rises and subscription service bills are on the chopping block, some may find Netflix enticing because of the ads. Ad-supported tiers may soften the pain of future anti-sharing measures, but it’s unclear how many users will sign up for them.
Simply said, this is it.
I wouldn’t have joined Netflix if it weren’t for account sharing. This was back when the service cost a fraction of what it costs today, and I surely wouldn’t have joined up if I hadn’t. Even if you’re sharing the expense with friends and family or borrowing money from someone else, you’re in the same situation.
When the service is at danger of losing subscribers, chasing after such folks seems like a bad idea. Instead than addressing the reasons why people are leaving, Netflix is focusing on those who have remained and risking alienating them in the process.
It’s hardly the worst idea in the world to have an ad-supported tier, and many other streaming providers have done so in the past. As long as it’s done right and Netflix doesn’t throw up an overabundance of advertising before or during the programme, of course. Season 4 of Stranger Things should not be interrupted by a commercial break.