International. Netflix has been a benchmark for its jump from renting DVDs to being a streaming platform. But now it is in the middle of a complex situation full of ups and downs, product of the unpopularity of the changes that it announced in April of this year, which in addition to subscribers has cost it the loss of value in the stock market.
It is important to note that Netflix began work in 1998, at that time its service was restricted to the rental of movies in DVD format, which it delivered by correspondence. Years later, in 2007, it managed to adapt to the digitization of content and, unlike its counterpart Blockbuster, did not underestimate technological changes, which allowed it to survive in a market that left behind the physical formats of VHS and DVD.
In a way, this earned the company a reputation for adaptability and business resilience. But in April of this year it experienced the biggest drop in subscribers since 2011, when it announced that it would look for ways to restrict password sharing and even no longer offer an account for several users.
This statement, according to the newspaper El País, was by nature that the around 100 million households that use its service, but do not pay for it, went from being viewers to new subscribers, but the reaction was rejection, which led to the loss of 200,000 customers in the first quarter of 2022. In addition, this number of casualties is forecast to increase, along with a further decrease in the growth of the platform, which was already slowed.
Causes of the crisis
Netflix's management indicated that the reduction in its growth and the search for new options to generate subscribers was partly due to competition with other platforms. As are Disney+, Apple TV+, Amazon Prime Video; discovery and Warner Bros," among others. In addition, he assures that his growth has been slowed by the habit of sharing passwords to avoid payment.
New proposals
So, in order to continue growing as a streamer, but not stop generating income Netflix has announced that by the end of this year it will introduce a subscription option with advertising on its platform, a model that would be cheaper for the end customer. Meanwhile, the idea of taking firm action against shared passwords has not been shelved and the restriction of accounts with multiple profiles to the same location, in an attempt to ensure that it is a single household, continues to stand.
In the same way, the option for Netflix to broadcast live content on demand has been put on the table, this due to the success achieved with the comedy special Netflix Is a Joke Fest that it had at the beginning of the year, which had more than 130 comedians in different locations in the United States, where figures such as Jerry Seinfeld stood out, John Mulaney and Wanda Syke, among others. In addition, the event also had the participation of rapper Snoop Dog, actor Kevin Heart and other artists.
Another added value that the platform hopes to boost is its offer of games through its App. And the possibility of improving interaction with realities, which have been a highly successful program format among the public, has also been discussed. Simply put, the company's priority is to reveal greater attractions and guarantee its revenue, while being able to include a greater number of subscribers.
Points to consider
However, it is not an easy road, because there is already a reading of discontent and pressure that the changes do not negatively affect the user experience, as happened before, a matter difficult to guarantee, but vital, since this last blow caused a loss of 70 billion in its market capitalization.
Finally, about the month of June a list of series and movies will leave the services of Netflix Latin America and Spain, so the company will face the results of these new proposals and actions in the second half of the year. So far, there is uncertainty about the positive or negative that will result.
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