Netflix Posts Subscriber Loss For The First Time In A Decade, Mulls Bringing Cheaper Plans With Ads

Netflix has said it may bring changes that include low-cost plans with advertisements and minimising password sharing.

More than 100 10 crore Netflix users are sharing their passwords with family and friends

New Delhi: After registering a loss in subscribers for the first time in a decade, owing to factors such as sluggish economic growth, inflation and geopolitical events such as the Russia-Ukraine war, Netflix has said it may bring changes that include low-cost plans with advertisements and minimising password sharing. The streaming giant has announced that it ended the first quarter of this year with 221.6 million subscribers and the APAC region, which includes India, added 1.09 million paid members in the region.

Netflix had avoided the idea of putting checks on password sharing but now, it has hinted that the looming change may arrive soon.

"Those who have followed Netflix know that I have been against the complexity of advertising, and a big fan of the simplicity of subscription," company co-CEO Reed Hastings said during an earnings conference call.

"But as much as I am a fan of that, I am a bigger fan of consumer choice. And allowing consumers who would like to have a lower price, and are advertising-tolerant, get what they want makes a lot of sense," Hastings added.

According to the company, in the near term, it is not growing revenue as fast as it would like. "COVID clouded the picture by significantly increasing our growth in 2020, leading us to believe that most of our slowing growth in 2021 was due to the COVID pull forward. Now, we believe there are four main inter-related factors at work," Netflix said in an earnings letter.

According to the streaming giant, more than 100 million or 10 crore Netflix users are sharing their passwords with family and friends. This includes30 million users in the US and Canada alone. In the earnings letter, Netflix added: “the large number of households sharing accounts” as a critical factor “creating revenue growth headwinds".

Earlier in March, the company had indicated that it may soon start charging users who share their account passwords with near and dear ones as it aims to stay afloat amid the rising competition from streaming rivals.

"We’ve always made it easy for people who live together to share their Netflix account, with features like separate profiles and multiple streams in our Standard and Premium plans. While these have been hugely popular, they have also created some confusion about when and how Netflix can be shared. As a result, accounts are being shared between households -- impacting our ability to invest in great new TV and films for our members," Chengyi Long, Director, Product Innovation at Netflix, had earlier said in a statement.