The decline in Netflix’s subscriber base has led to the acceleration of its plans for different subscriptions.
Netflix, the world’s most popular digital broadcasting platform, announced about a month ago that it experienced a decrease in subscribers for the first time in its 10-year history and its growth rate slowed down. The company’s CEO, Reed Hastings, announced that it plans to offer a more affordable and advertised subscription option, but that this could be implemented “in the next year or two.” However, according to a report in The New York Times, the decrease in the number of subscribers accelerated these plans. Netflix’s advertising subscription plan will go live later this year.
It has been on the agenda for a long time that Netflix plans to introduce a penalty system to prevent joint account use. Hastings was also openly talking about this. In a note sent to the company employees, it was stated that both advertising packages and new applications to prevent password sharing will be announced in the last three months of this year.
Netflix, which lost 200 thousand subscribers in the first quarter of 2022, attributed this to the competition and account sharing created by increasing digital platforms. The platform, which has 222 million paid subscribers as well as more than 100 million common users, launched a new plan last month that allows sub-memberships to be opened in Chile, Costa Rica, and Peru. This feature, which is currently in the testing phase, allows users to open sub memberships for 3 dollars. Thus, Netflix aims to generate revenue from accounts that will be shared free of charge under normal circumstances.
It is very clear that Netflix’s advertising subscription is also seen as a plan to prevent password sharing. Adopting an ad subscription will be a big step forward for Netflix, which has resisted advertising from the start. In his speech, Hastings explained the plan, “Those who follow Netflix know that I’m against ad clutter. As much as I don’t love advertising, consumer choice is important to me. So it makes sense to give what users want to pay lower wages and can tolerate.” and stated that Hulu, Disney, and HBO also use this method. Hastings also underlined that Netflix will remain just a broadcaster and will not track user data to match ads.