Netflix's vision of the future of streaming: More expensive or less convenient

Netflix's vision of the future of streaming: More expensive or less convenient

Last quarter, Netflix lost about a million customers - the most in the company's 25-year history. But it's been a terrible year to stop the bleeding, and the company hopes its new long-term initiatives will boost sales and subscribers.

Wall Street is encouraging these efforts, including curbing passwords and introducing cheaper ad tiers. However, they stand in stark contrast to what made Netflix the king of streaming: its popular consumer base. The broadcaster has never been able to compete with rivals like Disney ( DIS ) on pure content, but it has built its company on providing a better overall experience for customers.

Netflix ( NFLX ) is now trading some of that expertise for growth in the media business. "It's harder for people to share with family, it's harder for people to watch in multiple places ... and if you want your content to be interrupted by ads," said Michael Nathanson, media analyst at MoffettNathanson. , CNN Business. "So the initial proposition for ultra-premium consumers is now turned on its head."

These initiatives are undoubtedly good for Netflix's bottom line, but customers aren't necessarily asking for them. This can be problematic as the company tries to attract new users, reduce confusion and generate revenue at the same time. Ultimately, for Netflix to succeed in the streaming world, it needs to be less like Netflix.

"We... no ads"

We advertise for free. It's a deep part of our brand proposition.

"This is stated in Netflix's letter to shareholders in 2019.

The company added that it believes it "has a more valuable business in the long term because it is not competing for advertising revenue" and is focused on "competing to satisfy the public."

Boy, how things have changed. Last week, NetFix announced that Microsoft was a coalition of its new advertising level and stated that it is expected to launch a proposal on Tuesday at the beginning of 2023.

Three years later, Netflix Advertising is one of the basis for the company's future development with "never, always". This is confusing for subscribers and they do not have to see advertising, as current advertising programs are not, but now you have to choose among the cheapest advertising supports and awards. Zach Shuck, vice president of programming at Research, said: "My concern with the ad budget model is whether ad revenue will cover the loss of revenue from premium subscribers as some of the existing subscriptions are downgraded to the cheaper ad option." This was reported to CNN Business by the media company Magid.

One of the most important pillars of Neflix is ​​how advertising affects content. "Does Advertising Affect Netflix's Content Standards and Artist-Friendly Environment?" said the sheikh. "Are advertisers now expecting Netflix to censor content that Netflix doesn't care about?"

What is the password? Password sharing is another area that Netflix is ​​trying to strengthen, but it can be a difficult strategy.

The company said Tuesday that it is "in the early stages of monetizing the more than 100 million households that currently use Netflix but don't pay for it directly." Translation: You may have to pay more to share your account. Netflix is ​​testing possible solutions by offering two pilot features called "Extra Membership" and "Profile Sharing" in Chile, Costa Rica and Peru.

It is not easy for users to save their children, friends or colleagues in their account. "We know this will make a difference to our members," the company acknowledged. Until recently, Netflix had no problem with exchanging subscribers' passwords. Indeed, in an April letter to investors, the service said the policy could help its growth by "encouraging more people to use and enjoy Netflix." But now the company has to pay these people. Will it alienate millions of consumers?

“What concerns me is the goodwill they have built over the years… "When they do things that are supposed to be more convenient for consumers, they die over time," said Nathanson, the media analyst.

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