Reports have come out that Netflix lost an astounding total of 200,000 subscribers in Quarter 1. Resulting in stock shares drop over 20%, with another estimated 2 million losses in the second quarter. Following these revelations, the streaming platform announced that it will start charging more to users who share their accounts with people outside their families.
Netflix Subscription Charges Raises
Netflix came through with these price increase in January, and again in March. The streaming platform started testing this feature in Peru, Costa Rica, and Chile. In these countries, the additional costs were 7.9 PEN in Peru, $2.99 in Costa Rica, and 2,380 Pesos in Chile.
After these tests, the company is now ready to implement these changes to its users all across the globe. Meanwhile, it has also made clear that for the next year, it will keep making tests so as to properly charge customers who engage in sharing their account outside their households.
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“Frankly, we’ve been working on this for about almost two years. A little over a year ago, we started doing some light test launches that informed our thinking and helped us build the mechanisms that we’re deploying now,” Netflix chief product officer Greg Peters explained on the earnings call.
“We just did the first big country tests, but it will take a while to work this out and to get that balance right.”
Netflix Sub-Accounts
At the moment, Premium and Standard subscribers of the service are given the option to add something that has been referred to as “sub-accounts” for the people with whom they share their account outside of their household.
Every single sub-account not only will have its specific login details and password but it will also have its own personal profile with personalized recommendations. If the person to whom the sub-account belongs decides to create their own account, every feature of their sub-account will be transferred over to their new account. These sub-accounts do not count for the overall subscriber estimate. The company also announced goals to offer a lower-cost, ad-supported plan in the future. In contrast with the price increases for those who share their accounts.
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