Less than a week ago, Netflix revealed that as many as 221.6 million subscribers were registered on the platform during the first quarter of 2022. In comparison, 221.8 million user subscriptions were recorded in the fourth quarter of 2021. Subsequently, the global streaming giant suffered a loss of 200,000 subscribers for the first time in their decade-long history. As a result, Netflix has issued a warning of launching global cracking on password sharing. This change could ultimately result in user paying an extra fee for sharing their account credentials outside of their household.
Netflix disclosed its quarterly results report among the shareholders. In the letter, world’s largest streaming giant stated:
“Our relatively high household penetration—when including the large number of households sharing accounts—combined with competition, is creating revenue growth headwinds”
It is significant to mention that Netflix lost close to 700,000 subscribers during March 2022. The decline in the user base occurred when Netflix suspended its services in Russia after it invaded Ukraine.
On the flip side, Netflix gained massive popularity among the masses when COVID rocked entire global community. People were stuck in their households during the pandemic and they ended up gluing to their screens to watch different shows and movies on Netflix.
Netflix faces stiff rivalry from competitors
Some competition from other streaming platforms (Amazon Prime Video, Hulu, Disney+) and password sharing have put Netflix in little trouble of late. The concept of unique users registering to Netflix have declined greatly in the recent past mainly because of two aforementioned reasons.
Netflix is adamant on curbing the financial losses besides increasing the subscribers on the platform. According to global streaming juggernaut, some new measures would be implemented including charging users a fee for sharing passwords. Moreover, the company also talked about launching an inexpensive, advertising-supported plan.
However, the Co-Founder of Netflix, Reed Hastings had some other ideas but open to change. He said:
“Those that have followed Netflix know that I’ve been against the complexity of advertising. I’m more of a big fan of the simplicity of subscription. But 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”
According to Netflix, there are over 100 million households who do not pay for the streaming services. However, they do relish wide range of content available on the platform. In an announcement last week, Netflix revealed the plan of charging an additional fee for users in Chile, Costa Rica and Peru. The same strategy would be applied to other countries too. But, it remains to be seen when these changes are actually enforced and how users take it.