Video-on-demand provider Netflix is considering minimizing password sharing and creating a low-cost subscription plan heavily supported by advertising.
This follows the sudden exit of over 200,000 subscribers in the three months to March, the first contraction it’s experienced since the streaming service became available throughout the world outside of China six years ago.
Netflix Inc said inflation, the war in Ukraine, and fierce competition from rivals contributed to a loss of subscribers for the first time in more than a decade and predicted deeper losses ahead.
Suspending service in Russia after the Ukraine invasion took a heavy toll leading to the loss of 700,000 customers.
The entertainment giant is projecting a loss of another two million subscribers between now and June.
The company is banking on the planned ad-backed subscription plan to help regain the momentum it’s lost over the past year.
Netflix saw pandemic-driven lockdowns push up its subscriber base globally but with easing curbs, the number of customers has been on a downward trend.
At the same time, deep-pocketed rivals such as Apple and Walt Disney have been chipping away at their vast audience with their own video-on-demand services.
Netflix, which added 36 million subscribers at the height of the pandemic in 2020, serves roughly 221.6 million subscribers.
The jump in subscriber base in 2020 was by far the largest annual growth since its video streaming service’s debut in 2007.