Netflix Could Be in a Better Position Than You Think

Netflix has been going through a rough patch lately, but subscribers shouldn’t be overly concerned about the platform, at least not yet.

No matter how you cut it, Netflix is ​​no longer the streaming power it was a few years ago. It is bleeding subscribers, cracking down on families sharing passwords, and is even planning to introduce an ad-supported tier, something that was unthinkable in 2020. Netflix is ​​definitely feeling the pressure of a diverse marketplace and rivals like Hulu and Amazon Prime. but there is still no reason for current subscribers to abandon shipping.

“No, subscribers shouldn’t be worried,” Jason Ruiz, associate professor at Notre Dame and Netflix expert, told Lifewire. “Netflix is ​​the global leader in streaming television and it’s not going anywhere yet. We may see a shift in programming or distribution deals along the way, but I think Netflix’s place in the streaming hierarchy is secure for now.” .

Don’t be afraid of the loss of subscribers

Legions of members have already been spooked by Netflix’s latest developments, as the platform lost 970,000 members in the second quarter of 2022. That’s a staggering number, but it’s something Netflix was expecting. In fact, the loss of subscribers was less dramatic than expected.

“The second quarter was better than expected in subscriber growth,” reads Netflix’s letter to shareholders dated July 19. “We slightly underestimated global net paid increases in the second quarter (-1.0 million versus -2.0 million forecast).”

Benji-Salesan independent game analyst, said on Twitter that “the company is still facing challenges, but [this] it is a positive sign “.

The letter to shareholders says the company is in a “position of strength” and will be looking to “improve its core service” throughout 2022. Netflix shares actually rose after announcing the loss of its members, which is a good sign of his financial strength and stamina.

The problem of sharing passwords

The drop in subscriber numbers may not interest the average viewer, but cracking down on password sharing is a different story. The company is experimenting with unique password sharing strategies in select regions, such as allowing members to add an additional household to their account for an extra $ 2.99 per month.

It’s unclear how this password crackdown will manifest in the US in 2023, but Ruiz thinks it will impact subscribers and their wallets.

“I think it will affect us from a consumer perspective. The company joked about sharing passwords, but it’s time they got serious about what it actually costs them. On the consumer side, we will all have to decide how valuable Netflix is ​​to us. . Many people who have been watching Netflix for years with a “borrowed” account will have to decide if they want to pay. This also affects scheduling problems, as the lack of lively original programs will discourage many from pulling out their wallets to keep watching. ”

Netflix would do well to announce the arrival of password sharing along with strong new programming lineup. This could entice members who are on the fence to continue paying for the service, although the price would still be a significant factor. So, if you see a ton of great shows revealed for the coming year, get ready for an unfortunate later announcement.

For now, however, that’s normal for US subscribers.

Ads on Netflix are a wild card

Nobody likes ads, but bringing them to Netflix might benefit some members. As subscription costs continue to rise (a Netflix Premium plan now costs $ 20 per month), frugal viewers may be looking for easier alternatives for their wallets. Netflix announced earlier this summer that the next ad-supported tier will be “cheaper” than its current plans, although it stopped short of offering a specific number.

If that number is radically lower than its current options, it could attract expired customers back. The announcements may not have been in Netflix’s original plans, but if done right, they will be a big win for the streaming giant and a part of its community.

But if they got it wrong, viewers will let Netflix know.

“The announcements seem like the next logical step to me,” Ruiz told Lifewire. “Netflix will make money from ads, but it will also cost them, as many consumers can no longer tolerate watching ads. Many younger viewers have come of age after the demise of TV broadcasts and never have. [had] to watch TV commercials. Some may be willing to pay more to not see them. Others will throw in the towel and walk away from Netflix. ”