Netflix is creating a low-cost version of the streaming service to rein in customers who are now fleeing the service.
Shares of Netflix fell more than 25 percent in pre-trading on Wall Street after the energy giant reported horror numbers on Tuesday night.
Now, Netflix will create a low-cost version of the streaming service that includes ads, according to Bloomberg. They will also take action to prevent password sharing and cut down on investment in movies and TV shows.
This is a major change for the Energy Service, which has so far been completely ad-free.
Netflix CEO Reed Hastings spoke about the possibility of showing ads in a conference call with investors Tuesday night, after the numbers were released.
“Those who have watched Netflix know that I have been against the complexity of ads, and that I am a huge fan of simply subscribing,” Hastings said during the conversation.
“I’m a huge fan of consumer choice, and it makes a lot of sense to let consumers who want a lower price and tolerate ads, get what they want,” he said.
Hastings added that Netflix will work to build an ad-supported version of the service over the next year or two.
The number of electricity service subscribers reached 221.6 million at the end of March. In the first quarter, the company lost 200,000 subscribers, according to the quarterly report.
This is the first time the power service has lost subscribers in more than a decade.
Meanwhile, Netflix expects to lose 2 million customers in the second quarter.
According to the report, the company so far believes that much of the declining growth in 2021 was due to the cooling of the effects of the Corona pandemic. Now the company points out other factors:
- The competition with streaming services like Disney+, Amazon Prime, and HBO has continued for the past three years.
- Growth opportunities are hampered by the fact that many people share their accounts with others, according to the streaming service. They estimate that up to 100 million families have access to Netflix in addition to the approximately 221 million subscribers they have today.
- In addition, the Electricity Service believes that factors such as high inflation, slow economic growth and Russia’s invasion of Ukraine also have an impact. The availability of TVs on which to watch Netflix and the costs of internet traffic are also highlights.
Horror Numbers for Netflix
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