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Netflix already has a plan in the face of the loss of 200,000 users

It was clear that Netflix It would not sit idly by after it reported the loss of 200,000 users in the first quarter of 2022.

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As part of its strategy to counteract the worrying situation, the streaming video platform confirmed that it will launch a cheaper subscription. That if, with ads to compensate for the price drop.

He was the co-CEO of Netflix, Reed Hastings, who announced such an important move during the usual call with investors (information thanks to The Hollywood Reporter).

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However, users should not expect to see the cheap subscription anytime soon, as the company will spend at least a year studying the offer before rolling it out to everyone. The director does not rule out that The course lasts two years.

The loss of 200,000 users, the reason for the change of mind

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As recently as March, Spencer Neumann, Netflix’s chief financial officer, said they weren’t interested in an ad-supported subscription. “That is not in our plans at the moment. We have a great subscription business model on a global scale.” said.

What made him change his mind in such a short time? Without a doubt the disappointing figures reported in the first fiscal quarter of 2022.

Speaking to investors, Hastings himself acknowledged that consumers want a cheaper alternative. You have to remember that the platform has been steadily increasing its prices in much of the world, situation that begins to annoy a significant number of members. However, now Netflix wants to turn things around:

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“Those who have followed Netflix know that I have been against the complexity of advertising and am a big fan of the simplicity of subscription. But as much as I’m a fan of that, I’m more of a fan of consumer choice. And allowing users who would like to have a lower price and tolerate advertising to get what they want, it makes a lot of sense”, the platform mentioned in an official statement.

Netflix, with a close look at its competition so as not to be left behind

Another factor that has encouraged Netflix to explore a plan with advertising is the excellent acceptance that this type of subscription has had by its competitors. hbo max already offers a free subscription with advertisingwhile Disney Plus also plans to introduce a cheaper membership. The latter is expected to be available in much of the world in 2023.

“It’s pretty clear it’s working for Hulu, Disney is doing it, HBO did it. We have no doubt that it works.” Hastings added.

Given privacy concerns about any ad-supported subscription, Netflix understands that it does not intend to use a tracking system to collect data:

“In terms of earning potential, the internet advertising market has definitely moved on, and now you don’t have to incorporate all the information about people that you used to incorporate. We can stay out of that and really focus on our members, creating that great experience,” he concluded.

Losing 200,000 users is not the only thing that worries Netflix. The company expects to lose 2 million subscribers in the fiscal quarter due to a significant slowdown in its growth. Offering a cheap subscription is part of the strategy to try to stop the decline.

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