Bloomberg Line — The loss of 200,000 subscribers by Netflix Inc. (NFLX) in the first quarter of the year removed the service sector from streaming in the world and highlighted the need to reconfigure some links in the market, while other platforms are growing.
For a few months the company had already commented on the possibility of presenting new subscription models that included advertising and, therefore, would be cheaper for users. And in April, in the middle of the delivery of results when he explained that he projected to lose another two million clients in the current quarter, he reaffirmed the decision to include ads.
Before this panorama, it was learned that the company told its employees in an internal memo that the goal of including ads in their free or lower cost plans could be in the last quarter of 2022, much sooner than initially planned, reported the New York Times.
Since this report, the company’s share price has fallen and almost $70 billion has been wiped out of its capitalization.
Among Netflix’s reasons to argue The loss of users is the prevalence of password sharing and the growing competition from other streaming platforms that are also betting on their own productions and other blockbusters. At the time, the company pointed out that there are at least 100 million households that use its service and do not pay for it, out of its 221.6 million subscribers, according to Bloomberg.
Although Netflix co-CEO Reed Hastings had told investors it would work over the next two years to include a streaming platform with ads, the note revealed by the American media indicates that plans have accelerated.
This decision of the company of series, films and documentaries I would put it on the same level as others like HBO Maxwhich already offers US$10 plans with the inclusion of some advertising space.
Amid the restructuring of its business after the first quarter report, Netflix also launched a layoff plan, starting with the employees who work for Tudum, a platform that is responsible for promoting the content of streaming.
In addition, the company is already creating teams in its engineering department with junior and senior levels, which reflects the search to reduce costs in the middle of its operationreported in recent weeks Bloomberg.
Another of the actions carried out by the company is the control of passwords and shared accounts, a measure that years ago, when Netflix was not losing subscribers, was ruled out and that according to Hastings himself did not mean a concern.
Even in the midst of delivering first-quarter results, Netflix COO Greg Peters He acknowledged that he would be thinking of increasing the cost of plans where passwords are shared outside the same household.