Netflix's challenges between the fight against shared passwords and the advertising hypothesis
The increasing competition from similar services but also atavistic problems with sharing the password of the same subscription even outside the family are among the reasons given to this crisis: "We must compete and we must continue to improve our core services that make series, movies and now games what people really love, "said co-ad Ted Sarandos, reiterating that he plans to spend $ 18 billion producing unreleased content over the course of the year. 2022. Other voices within the company, however, speak of prudence and there are those who think that the priority is, for example, to break down the habit of take advantage of the same subscription in several different homes. According to Netflix data, more than 100 million homes around the world use shared accounts, with over 30 million in the United States and Canada alone.
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"This is a great opportunity for us because these users are already watching Netflix and enjoying our service", reads in a letter from the company to its shareholders: “Sharing has most likely helped our growth and we've made it easy for us to create multiple profiles. While these functions have become very useful, on the other they have generated confusion about when and how Netflix can be shared with other users ". The possibility of creating multiple profiles and viewing multiple titles from the same subscription at the same time was in fact created to allow a multiple vision within the same family unit or in any case of the same family, but it soon became a ploy to share one among friends as well. same subscription paying it less. Since March the streamer has started tests in countries like Costa Rica, Chile and Peru asking to pay an additional sum when it was found that the same account was being used in different houses.
The speech is quite simple: since the pool of people potentially interested in Netflix cannot grow indefinitely, or in any case it will not grow as fast when necessary to support the productive efforts of recent years, it is necessary to turn to those who are already fans of the platform but perhaps are using it without paying everything the due. Another way to stem the haemorrhage of subscribers is to propose cheaper formulas, which however means taking another unprecedented step for the company: introducing advertising. “Netflix fans know how much I've always been against the complexity of advertising in favor of subscription simplicity,” said co-ad Reed Hastings: “But I'm even more in favor of consumer choice. Allowing consumers who want to pay less and can tolerate advertising to have what they want seems very sensible to me ”. Similar solutions have been introduced by competitors such as Hulu, Hbo Max and soon Disney +, so it is clear that this is a market trend that should not be underestimated.
The fight against shared accounts and the opening to the possibility of a ad-supported model are all mechanisms that try to find a square in a business that grinds billions and billions of dollars to feed its greed for increasingly insatiable content but which at the same time needs more and more paying users to support itself. To this is added the general economic uncertainty, the aftermath of the pandemic from which we have not yet emerged and a global situation that is not exactly peaceful, all signs that put a strain on not only Netflix, but also all those media companies that have been in recent years. going through an unprecedented revolution, but which are still studying a convincing way to achieve sustainability.
