The end of an era: what changes will Netflix implement to increase its income?

In a recent report, the platform reveals that it has lost more than 200,000 subscribers in recent months and will make changes to compensate for the loss.

For iProfessional

05/14/2022 – 9:28 p.m.

The years in which Netflix spent billions of dollars on series and movies seem to have come to an end. The platform implements changes to face the loss of followers and the reaction of subscribers to this is unknown.

The streaming giant is going through a delicate moment in relation to the value of its shares. For that reason, managers explicitly asked their employees “to spend users’ money wisely.”

Netflix’s request to its workers was made through a memo circulated by the company. It is the first time that the directors of the streaming platform have sent a message of this type to their employees. It even contradicts the usual phrase they use to encourage them to “take risks and avoid the rules”.

The streaming giant is going through a delicate moment in relation to the value of its shares

The change in Netflix’s mode of action is due to the recent report revealing that it lost more than 200,000 subscribers in recent months. This occurs for the first time in more than a decade and is explained by several factors. Among them, the emergence of competitors, the exit of the pandemic and the generalized inflation that the planet is experiencing and that forces users to cut costs.

“We’re cutting back on some of our spending growth in both content and non-content spending,” CFO Spencer Neumann said during the first-quarter 2022 earnings call. “We’re trying to be smart about it.” Y prudent in terms of curtailing some of that expense growth to reflect the realities of business revenue growth.”

How it impacts Netflix subscribers

Those who watch content on Netflix will begin to notice changes to the service and the platform. According to the directors of the company, all of them are related to “cutting costs” and “increasing income” in relation to the number of users, Forbes pointed out.

The first of these, and the most obvious for subscribers, is the price increase. This is recorded in all regions, with the United States and Canada being one of the hardest hit. In Argentina, a recent increase was announced that, in some plans, exceeds 20%. The rise will leave the plans at the following values:

-Basic plan (single device, SD quality)

$429 membership + $274.56 tax

Total $703.56

-Standard plan (two devices simultaneously, HD)

$799 membership + $511.36 tax

Total $1,310.36

-Premium plan (four devices, 4K+HDR)

$1,199 membership + $767.36 tax

Total $1,966.36

Another radical change is that Netflix will begin to prevent users from sharing their accounts in order to spread the cost of the plan. Until now, the platform had not shown concern about this practice, but in recent weeks it has been stated that it can no longer be done.

In the coming months, the platform will enable advertising to compensate for the loss of income

Finally, another big announcement made by Netflix is ​​that over the next few months it will enable the advertising on the platform. This goes against what Reed Hasting, the company’s founder and CEO, has professed for several years. And it is that the executive never wanted advertising in the service. However, the current situation seems to be serious enough to change his mind and allow it.

Beyond all the changes mentioned so far, probably the biggest change for Netflix subscribers is the cancellation of some of their favorite shows. So far there have been no official announcements in this regard, but it is likely that several series will cease to be produced due to the budget cut.

The streaming giant, which several years ago knew how to reign alone, is no longer the undisputed owner of the sector. It remains to be seen how it will adapt to the new context and how subscribers will react to the new implementations that will begin to be noticed shortly on Netflix.

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