Netflix Loses 200k Users, Plans To Crack Down on Account-Sharing
As Netflix’s membership base continues to drop, the company has hinted at a password-sharing crackdown. Netflix has signaled that it may impose restrictions on families exchanging passwords as it tries to bolster its subscriber base following a steep drop in numbers.
As a result of tough competition from rivals, the number of homes utilizing the streaming service declined by 200,000 in the first quarter of the year. It also took a hit after raising prices in several nations and leaving Russia. In the three months leading up to July, Netflix told shareholders that another two million members were likely to leave. “Our revenue growth has slowed significantly,” the company told shareholders after releasing its first-quarter results on Tuesday.
Over than 100 million households, according to the streaming behemoth, are breaking its rules by exchanging passwords. Account sharing, according to the company, has likely aided its growth by increasing the number of people who use Netflix. To save money, households terminate streaming subscriptions.
However, Reed Hastings, CEO of Netflix stated on Tuesday that it was making it difficult to acquire new users in some nations. “Working on (account sharing) wasn’t a major focus when we were expanding rapidly. And now we’re putting in a lot of effort into it “He informed the stockholders. “If anti-password-sharing programs move too quickly and aggressively, they risk alienating an upcoming audience – many people who password-share outside their household aren’t even aware they’re violating the rules of their membership.”
High Cost of Living
Netflix has lost 700,000 members as a result of its withdrawal from Russia in March in effect to the Ukraine conflict. Another 600,000 individuals in the United States and Canada discontinued using its service when it raised pricing in January.
All of the company’s US plans have been upped in price, with a basic plan rising from $9 to $10 / month and a standard plan rising from $14 to $15.50. Basic and standard plans in the United Kingdom have both been raised by £1 monthly to £6.99 and £10.99, respectively.
Despite the cancellations, Netflix stated the price increases will bring in more revenue. However, economists believe that as the cost of living grows, the increasing cost of streaming platforms is putting a strain on households.
In the first quarter of this year, households in the United Kingdom terminated more than 1.5 million streaming subscriptions, with 38% claiming they wanted to save money. Mr Hastings seemed to recognise this when he announced Netflix was considering establishing a free ad-supported platform like Disney and HBO. Analysts believe it might provide the firm with a big new revenue stream, given it has previously avoided advertising.
Experts say Netflix’s biggest concern is fierce competition from companies like Amazon, Apple, and Disney, which are investing heavily in their online streaming services. “While Netflix and some other services were important in the shutdown, people are now reconsidering their purchasing decisions due to altering habits,” he said.
Evacuation of subscribers
Since October 2011, the company, which continues to be the world’s top streaming platform with more than 220 million members, has experienced consistent quarterly growth in subscribers. Profits declined over 6% to $1.6 billion, indicating a downturn from previous quarters.