Netflix, the biggest entertainment channel, has lost millions of subscribers as it ends account sharing.
According to the news, the channel lost nearly one million subscribers in Spain in the first quarter of 2023. This happened because the company decided to end account sharing.
Hence, the decision significantly impacted the number of subscribers, which caused a decline in the company’s revenue.
In February 2023, Netflix introduced a €5.99 ($6.57) monthly fee for users in Spain who shared their passwords with other users. According to the survey, two-thirds of the nation used someone else’s password.
“It’s clear this steep drop is due to the crackdown”, stated Dominic Sunnebo, global insight director at Kantar’s Worldpanel division. Hence, the loss of a million subscribers, even if most weren’t paid, would be a blow to Netflix regarding word-of-mouth recommendations for its shows and entertainment.
A research conducted by Kantar, the number of subscription cancellations tripled in the first quarter compared to the prior quarter. However, one-tenth of all Spanish Netflix subscribers still active said they intended to cancel in the second quarter.
After testing in various Latin American countries, Portugal, New Zealand, and Canada are on the same list. According to Netflix, millions of people use the channel daily without paying a single penny.
On the other hand, the company is applying different strategies to bring subscribers back to its channel. The offers channel offers include a cheaper subscription with advertisements and targeting users who share their login details with others.
Netflix is hopeful that users will start paying for their subscriptions soon. The issue of account sharing has always been a great challenge for Netflix. Whereas the company’s terms of service prohibit account sharing, many actual and primary users share their details with friends and family members.
The company has decided to crack down on account sharing in response to this ongoing issue. On the other hand, it still needs to be determined whether this strategy will ultimately be effective.
According to the analysts, Netflix’s new pricing policy may discourage users from using the service. At the same time, others have pointed out that the business emphasis on boosting Profitability might come at the expense of super satisfaction. Which ultimately might harm the company’s bottom line.
Despite the factors mentioned above, Netflix remains one of the most popular streaming services in the world. The company constantly tries and invests in original content to retain potential customers and attract new ones.
Additionally, Netflix has expanded into a new market, which has helped to drive growth and increase its traffic.
Undeniably, the success of Netflix depends on the quality of the content it reduces to strike a balance between Profitability and user satisfaction.
Though, it is also expected that if Netflix continues to deliver high-quality content while also dressing the account-sharing issue, then the company may be able to maintain its position as one of the top streaming services in the world.
Balancing Profitability And User Satisfaction
Streaming services need more privacy in terms of account sharing. It allows multiple users to use the channel simultaneously with the same login and password. Some users may pay for their subscriptions, but most try to get an account from friends or colleagues.
Hence, it’s a big challenge for streaming services like Netflix to maintain its quality and user traffic on the platform. Netflix’s recent decision to crack down on accounts will significantly impact its user base.
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