Advertising, account sharing, video games, what will Netflix be like in the coming months?

It was a massive hit expected by Netflix. In the second quarter of 2022, almost a million people left the platform. Three months earlier, the loss of 200,000 subscribers had given the company its first setback in 10 years.

In addition to this difficult start to the year, the streaming pioneer has to play with a difficult stock price. On November 17, Netflix recorded its all-time high by breaking the $700 mark. But since then, confidence has been eroding and the stock market has hovered around $200 since the end of April.

Device against password sharing

Although expected, this bug still forces Netflix to react. Therefore, in the coming months, the platform will change its strategy. Until now, you only had to deploy to a market to get subscribers. Now we have to go find them.

To do this, Netflix has two methods. The first is to search for people who have already been conquered by the service, but who benefit from it for free. Lax for many years, the company is preparing to deploy a device against the exchange of passwords between friends.

In experimentation since March, a new offering must authorize account sharing, for a fee. The streaming leader plans to charge around 3 additional euros to accounts whose use is not located solely in the subscriber’s habitual residence.

100 million households affected

The first sanctions fell on Honduras, Argentina, El Salvador, Guatemala and the Dominican Republic. But in the coming months, the supplement will no longer be reserved for Latin America and will be extended to the whole world, including France.

This first option should allow Netflix to optimize its profits. According to the company, about 100 million households are missing out due to password sharing. A not insignificant number as it represents about half of current customers.

In its financial results for the second quarter, the platform recorded 220.67 million paying. In France, the number of subscribers has surpassed the 10 million mark, Netflix co-CEO Ted Sarandos said in early July.

Towards targeted advertising?

Second action plan to increase its income, the leader of video on demand wants to lower its entry price. For this, one of the company’s founding promises has been broken: Netflix is ​​about to present an offer that includes ads.

With a cheaper subscription, the service wants to attract new customers by making up the shortfall with advertising revenue. A partnership has been signed with Microsoft in this direction. The computer giant must create a platform so that advertisers can integrate advertising during the broadcast of programs.

This new source of income runs the risk of opening a Pandora’s box of personal data use. To collect more money for the airing of the same advertisement, the company could present it to a certain category of its subscribers.

In announcing the partnership, Greg Peters, Netflix’s chief operating officer, said Microsoft “provides strong protections for subscriber privacy.” The potential targeting of the ads has yet to be confirmed or denied.

Loyalty through video games

However, Netflix has already indicated that not all shows will be available through this low-cost offer. While the vast majority of titles are included, discussions are still underway with some studios, including Sony Pictures, Universal and Warner Bros.

However, Ted Sarandos, CEO of Netflix, wanted to be reassuring: “If we offered this subscription today, users would continue to enjoy a good experience,” he said during the presentation of the company’s results at the end of July.

By billing “fraudulent” users or lowering its admission price, Netflix aims to regain new growth momentum. To retain the regulars or convert the last undecided, the platform offers a new service: video games.

The company has also given itself the means to achieve its ambition by acquiring a first video game studio, Night School Studio, in September 2021. This new service is available to subscribers from November 2021.

No broadcasts of sports competitions.

The streaming leader even wants to boost its presence in the field of video games. In March 2022, Netflix took over two other development studios: Next Games and Boss Fight Entertainment.

But the diversification of the platform should stop there. While its competitors position themselves in the broadcasting of sports competitions, Netflix has warned that it would not be interested in this activity.

The priority objective is to reverse the trend of subscriptions. The company expects to recover one million subscribers in the third quarter of 2022. And that, even before the implementation of its reconquest strategy.