The capacity of share your account Netflix has been one of the driving forces of Growth of the company over the years, helping it become the world leader in pay television. However, sometimes Netflix sees families who don't or won't pay for their subscriptions as an opportunity for growth. The company previously announced in 2022 which hopes to launch joint subscriptions this year, but has now set a more precise date: As announced in the results presentation, it will stop using it internally in the first quarter of this year. fourth trimester…
“It's not going to be a universally popular decision.“he acknowledged Greg Peters in his new role as co-CEO. “There will be existing subscribers who will be unhappy with this change and we will face backlash in the form of unsubscriptions,” the company acknowledged in an interview posted to its YouTube investor relations channel after the earnings release.
Netflix states that more than 100 million of homes currently share Netflix. “Account sharing today is eroding our long-term ability to invest in and improve Netflix and grow our business,” the company says. The company closed 2022 with 230 million of subscribers after adding 7.7 million in the last quarter of the year.
The company notes that the terms of use theoretically limit the use of Netflix to a single home. but it was ignored because it was somehow useful. The company began preparing the ground last year. “We're working hard to create additional new features that improve the Netflix experience, including the ability for subscribers to check which device their account is using and transfer their profile to a new account”he explained.
Netflix already launched the profile transfer option last October. With it, the user will be able to copy the information accumulated in the previous account. The data that will be transferred, as reported by Netflix on a help site, are recommendations, viewing history (including the ratings the person has given to the programs), the titles classified in My List, the chosen video games, the configuration ( language, subtitles…) and other characteristics such as the profile name or chosen avatar.
“Three or four dollars”
The company is introducing a shared subscription model: “With the introduction of cost sharing, users in many countries will be able to pay more if they want to share Netflix with people they don't live with.” The company guarantees that it will begin to “generalize” the new model “at the end of the first quarter.”
Netflix has not yet revealed the details, although one of the interview questions aired on the investor relations channel at least hints at that. The interviewer, analyst Bank of America, asked what motivates customers to choose between a shared account or paying “$3 or $4 more" to register. Peters He simply said thatThey try to be sensitive to finding the right prices, whether in terms of an individual account or, you know, an additional member“.
“Peters also gave a timeline and confirmed that the implementation of the measure will begin this quarter, but will be gradual. by. groups of countries, but we will see that in the coming quarters,” Fora said.
The company, which also announced on Thursday the slowdown of executive functions, also sends a reassuring message, ensuring that “From now on, all users will be able to watch Netflix on the go, whether on television or on a mobile device”. without detailing the control mechanisms that it will implement to distinguish between roaming use and non-adherent holders.
The company recognizes that, in the short term, the change in model may mean less consumption of its content, since some users stop watching it so as not to become additional members or shared payment accounts. However, he hopes the effect will be temporary and lead to an increase in followers. “We focus on revenue which is our main metric”Spencer Neumann emphasized as a good CFO.2
With Netflix losing subscribers for the first time in its history, plans to stop sharing passwords Netflix in the first half of 2022 have accelerated. The model change is a measure that was already underway in November, after Netflix will reveal a new advertising cut plan in November. pricing… which he sees as an opportunity for long-term revenue growth and increased advertising revenue. Ideal entry level to attract members.
The company guarantees that it is satisfied with the first results of the service with advertising in the user experience, value for advertisers and contribution to the company. “We believe lower prices will help increase membership. Also, as expected, we haven't had many changes to our other plans”, he assured the company on Tuesday.
Both initiatives go hand in hand, but in some ways they go hand in hand: “advertised plans give us the opportunity to present a lower price” to the consumer, which partially offsets the elimination of shared passwords, he explained. Peters.