Netflix tests new strategy to boost subscriber base

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Updated - March 18, 2022 01:28 pm IST

Published - March 17, 2022 04:23 pm IST

File photo

File photo

Netflix’s pace of growth during the pandemic is starting to slow. The video streaming platform was projected to add 8.5 million users in the December ending quarter. But it slightly missed that target and added 8.3 million subscribers during the fourth quarter.

Most of these new subscribers signed up from Europe, the Middle East and Africa, adding 3.5 million users, while the U.S. and Canada, added only 1.2 million. In India, a crucial growth market, the company is continuing to struggle against competition.

In January, the company’s shares tanked nearly 20% after it reported slowing subscriber growth. So, it is trying to increase both subscriptions and revenue despite a strong content line-up.

Earlier this year, Netflix increased its subscription fees. In North America and Europe, the company increased monthly subscription rates. This is the third time since 2019 the streaming giant hiked its subscription rates. In the U.S., its top-tier pack is now priced at $20 (Rs. 1,500) per month.

In India, it has retained its price slab, and its top-end option is priced at Rs. 649 ($8). The lower price could be due to the variability in the content it serves its users in different geographies.

Competition in the streaming video market has been ramping up, particularly from Disney+, with the cost of producing coveted original shows climbing as well. So, Netflix is testing a model that could increase revenue and subscription.

Charging sub-accounts

The streaming giant on Wednesday said it is testing a charging a fee to subscribers who share their accounts with people who don’t live in their homes.

“We’ve always made it easy for people who live together to share their Netflix account,” Chengyi Long, Director of Product Innovation at Netflix said in a post. “While these have been hugely popular, they have also created some confusion about when and how Netflix can be shared.”

With this move, Netflix is looking to make some money from free riders who use passwords of subscribers to access content.

In the coming weeks, the company will begin offering subscribers in Chile, Costa Rica and Peru the option to add upto two people to “sub-accounts” at a monthly fee of $2 to $3, Long added.

The streaming service would allow people already sharing accounts to transfer profile and viewing history information to new sub-accounts, she said.

Netflix will study the efficacy of this new model in the three countries to make changes in other geographies.

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