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In the months after that change, Netflix lost 800,000 subscribers, prompting an apology from Hastings for botching the execution of the spin-off.
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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. 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. Another rival, Hulu, has long offered an ad-supported tier. Netflix offered no additional information about how a cheaper ad-supported service tier would work or how much it would cost. 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. In these locations, subscribers can extend service to another household for a discounted price.
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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. “We’ve just got to get paid at some degree for them.” “Those are over 100 million households already are choosing to view Netflix,” Netflix CEO Reed Hastings said. 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 US and Canada. 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.
Shares plunged by more than 25 percent in extended trading after Netflix revealed its disappointing performance. The erosion, coming off a year of progressively slower growth, has rattled Netflix investors. Netflix projected a loss of another two million subscribers in the current April-June quarter. 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’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.įor the latest headlines, follow our Google News channel online or via the app. 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.
Looming changes announced late Tuesday are designed to help Netflix regain momentum lost over the past year.
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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.
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