Netflix is considering bringing in adverts for some subscribers and cracking down on password sharing amid a drop in customers for the first time in a decade.
The streaming service is also pondering a clampdown on password sharing. Netflix estimates around 100 million households around the world regularly watch for free by sharing accounts with friends.
Netflix's customer base fell by 200,000 subscribers in the first quarter of 2022, despite expectations that it would add 2.5 million customers. It is Netflix's first drop since it became available around most of the world. Its projections forecast another loss of 2 million subscribers between now and June.
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Netflix's decision to pull out of Russia due to the war in Ukraine led to a loss of 700,000. Others have cancelled their sign-ups following the relaxation of lockdown restrictions. The coronavirus measures boosted Netflix's subscriber base as people stayed at home during the pandemic's peaks.
The last time Netflix made a net loss in subscribers was in October 2011.
The company is looking to allow customers to sign-up for a cheaper subscription fee, Netflix's boss Reed Hastings revealed to shareholders in a call. But in return, those customers will have to watch adverts every time they use Netflix. Netflix offered no further details about how that will work, although rival Hulu already offers a lower-cost subscription option in return for adverts.
Netflix is also looking into cracking down on password sharing, likely by offering customers the chance to extend their subscription to another household for a fee, as it has trialled in Central and South America.
"When we were growing fast, it wasn't a high priority to work on [account sharing]," Boss Reed Hastings says in a BBC article. "And now we're working super hard on it."
Around 100 million households access Netflix for free charge by sharing accounts with friends, according to Netflix's estimates. In a letter to shareholders, Netflix hinted at how it will crack down on password sharing.
"Sharing likely helped fuel our growth by getting more people using and enjoying Netflix. And we've always tried to make sharing within a member’s household easy, with features like profiles and multiple streams.
"While these have been very popular, they’ve created confusion about when and how Netflix can be shared with other households. So early last year we started testing different approaches to monetize sharing and, in March, introduced two new paid sharing features, where current members have the choice to pay for additional households, in three markets in Latin America."
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