What were the consequences of Netflix's account sharing restrictions?
Haebom
1
A few months ago, Netflix was criticized for officially announcing that it would limit account sharing, and then gradually expand the policy from certain regions. And recently, it launched a low-cost plan that includes ads. So were these policies really the wrong choices Netflix made, as people say?
Price increases and user growth
First, Netflix raised the price of its lowest tier from $9.99 to $11.99. This price increase only applies to new subscribers, while existing subscribers will keep the previous price. This strategy is intended to increase the company's profits, and the company's total revenue has reached $8.5 billion.
Growth of advertising rates
Netflix has increased its subscriber base by nearly 70% by introducing ad-supported plans, showing that the company is exploring different revenue models.
So, what are the consequences of account sharing restrictions?
Netflix gained 9 million new subscribers by restricting password sharing and raising prices on its lowest tier, increasing the company’s total user base by more than 10% to 247 million . In other words, the strategy was criticized by the public, but the market actually responded well.
Questions to consider
How effective are password sharing restrictions?
Since this policy was introduced, the number of subscribers has increased significantly. But can this be sustained in the long term?
What is the impact of the price increase?
Since the price increase only applies to new subscribers, existing subscribers may see it as a loss to cancel their subscription. However, this effect may be negative for new Netflix customers.
What is the future of advertising pricing?
The number of subscribers to advertising plans has also increased significantly, which means Netflix is successfully implementing various revenue models. However, the key is how to maintain the quality of advertising and user experience.
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