Amid fightback activity, streaming service may also need to ask whether actual product needs changing
It is the latest massive miss from a large technology company, and has sparked a flurry of fightback efforts. But can the streaming service really carry on growing forever? And do its plans for the future show confidence – or panic?is a reduction in subscribers for the first time in a decade. Wall Street analysts had been expecting it to announce growth of about 2.5 million new customers, and were stunned when the company instead confirmed more had cancelled than joined.
Around the world, Netflix has 222 million subscribers. In its biggest markets, however, it has an appreciable portion of all households: in the US and Canada, 75m out of a total 142m households have a subscription to Netflix. When you add in password sharing, which Netflix says accounts for 30m additional households using the service in North America, it becomes clear the company is fighting for new signups from a rapidly shrinking pool of non-subscribers.
However, Netflix is exploring the possibility of a soft price cut, in the form of an ad-supported tier, according to Reed Hastings, its chair and co-founder. A cheaper subscription funded by adverts could help expand Netflix into households and regions that had previously been unable to afford the service at full price, a move that has previously been roundly rejected by the company.Netflix estimates 100m households globally access its services through password sharing.
, Netflix has simply started to ask subscribers to pay a small additional fee, about $3 a month, if they share their service with people outside their household.The deeper question for the company is whether it needs to change its actual product, rather than simply fiddling with price points and subscription tiers. Unlike many of its competitors, Netflix has focused almost entirely on a relatively narrow slice of original and licensed film and TV.
In contrast, competitors such as Amazon, Apple and Disney have looked to include sports, news and light entertainment in their wider packages. A 2018 report suggested Netflix was exploring news programming, but the company instead appears to have gone down other routes –
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