Monday, May 16, 2022, 11:20 Economy

Netflix Announces New Measures: Advertisements & Actions Against Account Sharing

Towards the end of last month, Netflix reported that things weren't running quite as smoothly as previously and that some greasing of the machine might be in order. The general trend has been a yearly increase in subscription numbers, especially during the times of corona, lockdowns, and other curfews. Currently, however, things have gone in exactly the opposite direction. Netflix's last quarter saw the streaming giant witness its first net loss in a decade – and for the months of April to June, the company predicts another millionfold in subscriber losses. Although the company continues to make a profit, in terms of its long term health, rising production costs with simultaneous drops in subscribers could add up to a big problem over time.

Ad Support Planned For Introduction By End Of 2023
As a countermeasure, Netflix recently announced that it is at work on a new business model previously considered out of the picture. Although the service has always been considered free of advertisements and subsisted solely on its subscription fee, the introduction of advertising as an additional source of revenue could help improve the current rocky outcropping that the company is slowly sailing towards. With the streaming service's current model, customers are spared the hassle of advertisements altogether. However, the company hopes to introduce another, more affordable subscription model – and according to current indications, it shouldn't take all too long until the new model becomes available. The company recently declared the fourth quarter of the year as a target in an internal memo to its employees. There aren't any exact details, however, it is clear that the new subscription model will target more price sensitive customers who find the current subscription prices too expensive.



Trial Run: Legalized Account Sharing – At A Price
However, there's still another problem facing the company beyond subscription price and accessibility – account sharing. Approximately 100 million households utilize Netflix without paying for it, given how easy it is to share access to a Netflix account with one's friends and family members. One potential measure that the company is considering would involve an additional fee for each instance of account sharing. The "feature" is currently being piloted in countries such as Chile, Costa Rica, and Peru – whether or not there will be an international expansion or not remains unclear at this time. Exactly how Netflix plans to restrict access to its services outside of the "household" isn't detailed in the company's internal memo.

More articles you might enjoy to read: