Xinhua News Agency, Beijing, April 23 (Xinhua) -- The latest financial report of the US streaming media platform Netflix Company shows that the net loss of users in the first quarter of this year was 200,000. This made Netflix's original guarantee to investors that "the number of users rose by 2.5 million" failed, and Netflix's stock price fell by 35%.
The Associated Press reported on the 22nd that in order to recover losses, Netflix may be ready to "open the knife" to those viewers who watch Netflix online programs for free by logging in to the accounts of family and friends.
Netflix co-CEO Reed Hastings revealed in a shareholder conference call on the 19th that Netflix estimates that there are about 100 million "unpaid users" worldwide, and Netflix has more than 200 million paying users. This means that one in every three Netflix viewers is "watching in vain".
A man wearing a mask checks his cell phone on the subway on Aug. 11, 2021 in Miami, Florida, U.S. Xinhua News Agency (Photo by Monica McGavin)
Hastings hinted that Netflix intends to expand the scope of the "shared" package charging policy it has already launched in Latin America, whereby each user can open two "sub-accounts" of $3 per month in addition to their monthly payment. This is seen as a "soft" measure to encourage more people to become paying users. If this policy is applied, users who want to share their accounts with family and friends will have to pay about 50% more.
However, how to deal with those "white-watching" audiences, Netflix did not say. Hastings said the company may evaluate different treatment options next year. The Associated Press reported that in a test last year, Netflix asked viewers to verify their accounts via email or text message.
Some users said they might cancel their subscriptions if Netflix made any move to restrict the sharing of account passwords.
Alexander Klein, who lives in Albany, New York, told The Associated Press that he became a Netflix user in 2013 and usually shares account passwords with his mother-in-law. In recent years, a series of price increases and the reduction in the number of watchable dramas by Netflix have made him dissatisfied, and if he restricts the sharing account and makes him pay $15 a month but can only watch it by one person at the same time, it may become the "last straw" for him to cancel the subscription.
On March 19, 2020, visitors visited Times Square in Manhattan, New York, USA. Photo by Xinhua news agency reporter Wang Ying
Another way for Netflix to increase revenue may be "plus advertising". Hastings has been a vocal advocate of Netflix's "ad-free" tradition in the past, arguing that advertising distracts users from entertainment content. However, competitors, with their respective streaming services, are increasingly eroding Netflix's dominance in this industry. As the pandemic eases, viewers have more entertainment options, and high prices in the U.S. will make users think twice before choosing to subscribe to streaming services.
Christopher Hamilton, a professor at Syracuse University who studies streaming, said Netflix services offered at preferential rates would be popular with consumers who wanted to "save money," while users who wanted to chase dramas "without ad interference" would pay higher fees. According to a recent survey by the consulting firm Accenture, streaming advertising sales revenue may grow faster than subscription fee revenue in the next 5 years.
Both potential revenue increases for Netflix risk losing more users. Netflix has suffered a similar crisis before. In 2011, Netflix lost 800,000 users after announcing a charge for streaming services. After a complete transformation of streaming and the launch of a number of popular home-made dramas, it has won back many users. (Shen Min)