Netflix may soon provide cheaper plans ‘with ads’ to get back lost subscribers
Netflix said it lost 200,000 subscribers in the first quarter, the worst loss suffered by the online streaming giant in the past decade of its services.
Rocked by a huge loss of subscribers amid inflation and the war between Russia and Ukraine, leading online streaming platform Netflix has announced that it may offer cheaper plans that have advertisements to bring back the lost users.
This comes as the company reportedly lost 200,000 subscribers in its first quarter – the first such decline in a decade of its services – fuelled by growing competitors, as well as the loss of nearly 700,000 members who suffered when they announced suspension of services in Russia.
Netflix fell well short of its forecast of adding 2.5 million subscribers in the first quarter and had predicted a further loss of 2 million subscribers during the April-June period despite releases like Stranger Things, Better Call Saul and Ozark, and big banner movies like The Grey Man.
Netflix had posted huge growth in the initial months of the Covid-19 pandemic when most people were stuck at home due to lockdowns. However, the same company's stock went tumbling 26 per cent on Tuesday, erasing almost $40 billion or nearly half of its stock market value.
How Netflix aims to gain back subscribers
"Those who have followed Netflix know that I've been against the complexity of advertising, and a big fan of the simplicity of subscription," Netflix CEO Reed Hastings was quoted as saying by Reuters. "But, as much as I'm a fan of that, I'm a bigger fan of consumer choice."
Netflix now aims to work on more affordable, ad-supported subscription plans over the year or two, Hastings announced.
The company has also announced that it is working on generating additional revenue from customers who share their account with friends and family outside their home.
Account-sharing is a longstanding practice, and Netflix is exploring ways to derive revenue from the 100 million households watching Netflix through shared accounts, including 30 million in the United States and Canada alone.
The streaming giant has already expanded its platform to other parts of the world, focusing on regional content.
Streaming services are not the only form of entertainment anymore, according to the latest Digital Media Trends survey from Deloitte, released in late March.
The survey revealed that Generation Z, those consumers ages 14 to 25, in fact spend more time playing games and watching user-created videos like those on TikTok and YouTube than watching movies or television series at home, or even listening to music.
To keep up with the trend, Netflix also introduced a video games section last year ‘at no extra cost’ to give people another reason to subscribe.
(With Agency inputs)