These days there has been much talk that, according to a Kantar study, Netflix has lost 1 million users in Spain in response to the platform’s change in strategy regarding shared accounts. Such alarmist headlines have been used that it almost seemed like the end of the world for Netflix, but the truth is that In the company they are very clear that their response is going to be to ignore it, and it makes sense.
they already counted on it
Obviously, Netflix cannot be happy with this loss, but several details must be taken into account. The first is that it is a loss of users, not of subscribers, where of course there has also been a drop, but less pronounced. Also, from the platform already had strong initial resistance in all those markets in which this new policy is applied.
One only has to go back to Netflix’s latest quarterly report to take into account that this first movement against shared accounts has been noticeable, but not so much, since the platform added 1.75 million more subscribers worldwide, for below the expected growth of 2.3 million. In return, free cash flow, a good indicator of the economic health of any company, has gone from $802 million a year ago to $2.1 billion in this case. It has more than doubled it.
Also, Netflix He also gave Canada as an exampleanother of the markets in which the innovations in shared accounts were introduced at the same time as in Spain, to make clear their confidence in this new model: “In Canada, which we view as a reliable indicator for the US, our payment user base is now larger than before the launch of shared account payment, revenue growth has accelerated and is now growing faster than in the US“.
In this way, it is clear that the main objective becomes as profitable as possible, a move in line with Wall Street’s current demand for streaming companies. In addition, the platform is clear that part of the subscribers who unsubscribe now will end up returning, which will further stabilize the upward situation.
The great acid test will be to see how this movement is reacted in the United StatesWell, it is true that Netflix can afford to make certain adjustments depending on the market – not so long ago it announced price reductions in several countries – but in its country of origin things get complicated.
There – and in many other countries – this new policy is expected to come into force on a date yet to be specified in the second quarter of 2023, and Netflix itself assumes that this will have a clear impact on its accounts in the short term, but also what is a key move for the future of the company:
Similar to Latin America, we see a cancellation reaction in each market when we announce payshare plans, which has an impact on member growth in the short term. But as borrowers start to activate their own accounts and existing members add ‘bonus member’ accounts, we see an increase in acquisition and revenue.
Spain may end up becoming a nuisance for Netflix, but it will take a lot more than that for them to rethink their new policy. That when they said all this they already knew how it was affecting his decision in Spain, and he didn’t care.
In Espinof | The 13 Best Netflix Miniseries