HEAT ALERT

Relentless heat lingers today in Brooklyn; tracking threat of pop-up strong thunderstorms

Netflix aims to curtail password sharing, considers ads as it loses 200K subscribers

Looming changes announced late Tuesday are designed to help Netflix regain momentum lost over the past year. Pandemic-driven lockdowns that drove binge-watching have lifted, while deep-pocketed rivals such as Apple and Walt Disney have begun to chip away at its vast audience with their own streaming services.

Associated Press

Apr 19, 2022, 9:39 PM

Updated 793 days ago

Share:

Netflix aims to curtail password sharing, considers ads as it loses 200K subscribers
An unexpectedly sharp drop in subscribers has Netflix considering changes it has long resisted: Minimizing password sharing and creating a low-cost subscription supported by advertising.
Looming changes announced late Tuesday are designed to help Netflix regain momentum lost over the past year. Pandemic-driven lockdowns that drove binge-watching have lifted, while deep-pocketed rivals such as Apple and Walt Disney have begun to chip away at its vast audience with their own streaming services.
Netflix's customer base fell by 200,000 subscribers during the January-March quarter, the first contraction the streaming service has seen since it became available throughout most of the world other than China six years ago. The drop stemmed in part from Netflix's decision to withdraw from Russia to protest the war against Ukraine, resulting in a loss of 700,000 subscribers. Netflix projected a loss of another 2 million subscribers in the current April-June quarter.
The erosion, coming off a year of progressively slower growth, has rattled Netflix investors. Shares plunged by more than 25% in extended trading after Netflix revealed its disappointing performance. If the stock drop extends into Wednesday’s regular trading session, Netflix shares will have lost more than half of their value so far this year - wiping out about $150 billion in shareholder wealth in less than four months.
The Los Gatos, California, company estimated that about 100 million households worldwide are watching its service for free by using the account of a friend or another family member, including 30 million in the U.S. and Canada.
"Those are over 100 million households already are choosing to view Netflix,” Netflix CEO Reed Hastings said. “We’ve just got to get paid at some degree for them.”
To prod more people to pay for their own accounts, Netflix indicated it will expand a trial program it has been running in three Latin American countries - Chile, Costa Rica and Peru. In these locations, subscribers can extend service to another household for a discounted price. In Costa Rica, for instance, Netflix plan prices range from $9 to $15 a month, but subscribers can openly share their service with another household for $3.
Netflix offered no additional information about how a cheaper ad-supported service tier would work or how much it would cost. Another rival, Hulu, has long offered an ad-supported tier.
While Netflix clearly believes these changes will help it build upon its current 221.6 million worldwide subscribers, the moves also risk alienating customers to the point they cancel.
Netflix was previously stung by a customer backlash in 2011 when it unveiled plans to begin charging for its then-nascent streaming service, which had been bundled for free with its traditional DVD-by-mail service before its international expansion. In the months after that change, Netflix lost 800,000 subscribers, prompting an apology from Hastings for botching the execution of the spin-off.
Tuesday’s announcement was a sobering comedown for a company that was buoyed two years ago when millions of consumers corralled at home were desperately seeking diversions - a void Netflix was happy to fill. Netflix added 36 million subscribers during 2020, by far the largest annual growth since its video streaming service’s debut in 2007.
But Hastings now believes those outsized gains may have blinded management. “COVID created a lot of noise on how to read the situation,” he said in a video conference Tuesday.
Netflix began heading in a new direction last year when its service added video games at no additional charge in an attempt to give people another reason to subscribe.
Escalating inflation over the past year has also squeezed household budgets, leading more consumers to rein in their spending on discretionary items. Despite that pressure, Netflix recently raised prices in the U.S., where it has its greatest household penetration - and where it's had the most trouble finding more subscribers.
In the most recent quarter, Netflix lost 640,000 subscribers in the U.S. and Canada, prompting management to point out that most of its future growth will come in international markets. Netflix ended March with 74.6 million subscribers in the U.S. and Canada.


More from News 12
1:53
HEAT ALERT: Peak of the heat and humidity today in Brooklyn; tracking pop-up thunderstorms later

HEAT ALERT: Peak of the heat and humidity today in Brooklyn; tracking pop-up thunderstorms later

0:26
NYPD: 2 suspects wanted for assaulting, flashing gun at food delivery worker

NYPD: 2 suspects wanted for assaulting, flashing gun at food delivery worker

1:31
NYC provides 'cool kits' to those working in the scorching heat

NYC provides 'cool kits' to those working in the scorching heat

1:39
Brooklyn high schoolers gather in Crown Heights to show off their businesses

Brooklyn high schoolers gather in Crown Heights to show off their businesses

1:56
New BQE development plans to improve traffic flow and pedestrian access

New BQE development plans to improve traffic flow and pedestrian access

2:22
Tips on how to stay cool during the one of the hottest days of the week in NYC

Tips on how to stay cool during the one of the hottest days of the week in NYC

1:48
NYPD: Ride-share driver shot in the head in Prospect Heights; 2 suspects at large

NYPD: Ride-share driver shot in the head in Prospect Heights; 2 suspects at large

1:40
Fake MTA service signs spotted in NYC subway system

Fake MTA service signs spotted in NYC subway system

0:30
Man wanted for punching MTA bus driver in East New York, NYPD says

Man wanted for punching MTA bus driver in East New York, NYPD says

0:24
Police: Delivery worker stabbed in the chest in Bensonhurst

Police: Delivery worker stabbed in the chest in Bensonhurst

0:24
Costco recalls portable charger over fire concerns

Costco recalls portable charger over fire concerns

2:06
Pride Month: Local salon goes the extra mile to help all people feel welcome and look their best

Pride Month: Local salon goes the extra mile to help all people feel welcome and look their best

1:47
Volunteer group takes community safety in Brooklyn to a new level

Volunteer group takes community safety in Brooklyn to a new level

0:59
Mayor announces over $1 billion set aside to create new jobs for New Yorkers

Mayor announces over $1 billion set aside to create new jobs for New Yorkers

1:56
Midwood man bitten by snake he found in his bathroom

Midwood man bitten by snake he found in his bathroom

1:54
Feeling dehydrated? Water intake calculator can help you stay safe during hot weather

Feeling dehydrated? Water intake calculator can help you stay safe during hot weather

1:38
Health experts urge Brooklyn swimmers to stay safe before heading into the ocean to cool off

Health experts urge Brooklyn swimmers to stay safe before heading into the ocean to cool off

0:31
NYPD: 15-year-old shot and injured in East Flatbush; 4 suspects wanted

NYPD: 15-year-old shot and injured in East Flatbush; 4 suspects wanted

1:46
Coney Island beach left covered in trash overnight amid hot weather

Coney Island beach left covered in trash overnight amid hot weather

1:58
Shuffleboarding hot spot offers retro fun with a modern touch

Shuffleboarding hot spot offers retro fun with a modern touch