Big changes coming to Netflix as streaming services cut staff and content – so what does this mean for subscribers?
The blows continue for Netflix as the world’s largest TV and movie subscription service struggles to weather a stock drop and subscriber loss drama.
For the first time since 2011, the service has declined in subscriber numbers, with 200,000 subscriptions lost between January and March.
In a letter to shareholders, Netflix said that the dark times would continue and expects to lose another two million in the coming quarter.
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Share prices are down 35 percent as investors question Netflix’s future as a market leader.
So what is the streaming giant doing to recover this stock price and subscriber plunge?
Founded in 1997, the global service, along with employees, has halted a series of projects in development. Credit: future release/future release via Getty Imag
Three things: it’s confirmed major cuts in staff and content, introducing a cheaper membership tier, and cracking down on password sharing.
Quality over quantity
Founded in 1997, the global service, along with employees, has halted a series of projects in development.
Phil Rynda, Netflix’s Director of Creative Leadership and Development for Original Animation, has been fired, as has part of his team, The Wrap reports.
Some Netflix original series and movies, especially many animated series, has been discontinued.
One of the biggest cancellations is the Bone animated series, an adaptation of Jeff Smith’s comics from 1991 to 2004, The Wrap says.
Jeff Smith took to Twitter to express his disappointment, sharing a series of illustrations captioned “Sigh”.
Other cancellations include Toil and Trouble and The Twits adaptation – the latter an interesting decision given that Netflix bought the Roald Dahl Story Company just seven months ago.
According to Bloomberg, the sequel to Will Smith’s film Bright was also scrapped.
The cancellation is reportedly unrelated to Smith’s hit incident at the Oscars in March.
New Membership Level
To stay competitive in the highly saturated streaming market, Netflix is also exploring a cheaper membership tier — an option that would introduce ads.
In a taped conference call last Tuesday, Netflix Chief Executive Reed Hastings said, “Those who have followed Netflix know that I have been against the complexity of advertising and a big fan of the simplicity of subscriptions.
CEO Reed Hastings bought over 1.33 million Netflix shares, up 67 percent in 2020. Credit: AP
“But as much as I’m a fan of that, I’m a bigger fan of consumer choice.
“And it makes a lot of sense to let consumers who want a lower price and who are ad tolerant get what they want.”
Hastings stated that Netflix has a two-year term to provide the option to subscribers.
Crackdown on password sharing
Since the early days of Netflix, the platform has allowed multiple accounts under one membership regardless of users living in different locations.
However, the service has announced that it will use one membership for several households.
According to the letter to Netflix shareholders, an estimated 100 million households currently do not pay to use the service.
Netflix recently broke records with ‘Bridgerton’s season 2, the most-watched English-language show ever. Credit: Netflix
According to Netflix, standard and premium account members can add “subaccounts” for up to two people living in separate households.
But the additional costs are about $A4are extra per month.
Why are these changes necessary?
Netflix peaked in subscriber numbers at the end of 2021, with record growth as COVID lockdowns trapped television viewers.
But the service lost 200,000 subscribers in the first quarter of 2022, its first major loss in a decade.
In addition, 700,000 subscribers were cut when Netflix withdrew from Russia because of the war in Ukraine.
Furthermore, the industry is becoming increasingly saturated as more major players thrive, including Hulu, Amazon Prime Video, and Disney+.