For years, it has tacitly allowed the practice, which functions as an effective discount, even building it into its pricing structure with tiers of membership that allow for more devices streaming simultaneously.īut now, it has started experimenting with stricter controls to try to turn some of those additional households into customers in their own right – particularly because, unlike homes that are not subscribed to Netflix at all, those shared users definitely have the right technology to use the service. Netflix estimates 100m households globally access its services through password sharing. What about all the people sharing passwords? A cheaper subscription funded by adverts could help expand Netflix into households and regions that had previously been unable to afford the service at full price, a move that has previously been roundly rejected by the company. However, Netflix is exploring the possibility of a soft price cut, in the form of an ad-supported tier, according to Reed Hastings, its chair and co-founder. Netflix also points out that, were it not for the war in Ukraine, it would actually have gained subscribers: it suspended services in Russia, losing 700,000 accounts in the process. But the company says it has been happy with the results, saying the rises “remain significantly revenue positive” – and thinks it still has “among the best retention in the industry”. Netflix has been increasing its monthly fees sharply around the world, with some UK subscribers now paying a third more than they were less than two years ago for the same service. When you add in password sharing, which Netflix says accounts for 30m additional households using the service in North America, it becomes clear the company is fighting for new signups from a rapidly shrinking pool of non-subscribers. In its biggest markets, however, it has an appreciable portion of all households: in the US and Canada, 75m out of a total 142m households have a subscription to Netflix. Wall Street analysts had been expecting it to announce growth of about 2.5 million new customers, and were stunned when the company instead confirmed more had cancelled than joined.Īround the world, Netflix has 222 million subscribers. The headline failure for Netflix is a reduction in subscribers for the first time in a decade.
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