During Netflix’s most recent earnings call, co-CEO Reed Hastings announced that Netflix is having a slowing revenue growth and its first subscriber drop in over a decade. He also mentioned that the company was still figuring out their new model. In addition, he said that an ad-supported subscription would not be available for another year or two.
To increase subscribers and curb revenue loss, the company suggested implementing new measures. For example, charging users a fee for sharing passwords and introducing a cheaper advertising-supported plan. However, The New York Times reported that Netflix is speeding up efforts to reverse those trends. And we can expect these changes by the end of the year, earlier than originally planned.
New Changes Ahead
Netflix, which has 221.6 million subscribers, noticed a surge in demand in the early days of the pandemic. People all over the world were locked in at home and raced to their televisions to binge-watch episodes and movies. But sharing passwords and tough competition from other streaming platforms have made it harder for the streaming company to pull in new viewers.
Netflix revealed last month that it would start charging subscribers who share passwords. For example, they could charge a fee for the additional members. Currently, there are more than 100 million households that use Netflix but do not pay for it, said the company in a letter to their shareholders last month.
Hastings has claimed from the beginning that he appreciates the simplicity of the subscription. He also said that he was against the complexity of advertising. However, in a recent interview he claimed, “As much as I’m a fan of that, I’m a bigger fan of consumer choice. And allowing consumers who would like to have a lower price and are advertising-tolerant get what they want makes a lot of sense.”
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