Is Netflix on the ropes? Everything after the end of shared accounts, the price cut and the flight of advertisers

#GoodbyeNetflix was the hashtag that many users chose to say goodbye to the platform in recent days, accompanied in many cases by a screenshot of the message they received when unsubscribing. The reason for these marches and the anger with which they did it was the new policy of the red platform that eliminates the possibility of sharing an account with family or friends who do not live at the same address. What was once the flag of Netflix, and also one of its points in favor, is now a reason for anger. But, Is the company really facing an image crisis and user flight?Do you think this could be a before and after or is it just a temporary anger? Of course, to answer these questions with reliable evidence we will have to wait for the next investor conference where they reveal what results the action has given, for better or for worse, or in both directions, but for now we can analyze the situation.

The first thing to clarify is that widespread anger doesn’t catch Netflix executives off guard. Absolutely. As we have collected here, for the company there are more than 490 million dollars at stake in the United States alone regarding shared accounts, which would win if the 30 million people who, they estimate, use Netflix in the US and Canada without paying their own account pay, using that of others. Even more money if we escalate the situation globally. In the interview they gave to BloombergTed Sarandos and Greg Peters, co-CEOs of the company, were asked how many people who share an account would pay for their own and Peters replied: “These are people who know how to watch Netflix. They have seen something on Netflix and they liked it. Our My job is to get them to come back in a couple of years. We’re not going to get it from the start. Some of those people share it because they’re more price sensitive or less committed or whatever. But if we offer a ‘Wednesday’ every week or a ‘Glass Onion’, we will win back most“. That is, at Netflix they knew that the measure was going to bother and that it would make many people leave, but they count on it, despite everything, to compensate them.

The chickens that enter through the ones that are leaving

“It’s a gradual approach, but the vast majority of people who don’t pay for Netflix will have to pay for Netflix,” Peters added, “There will be dissatisfied customers.” So why do they do it? The answer is simple: because they have a lot to gain and, quite possibly, they will. To begin with, as much as there are currently many users unsubscribing (and making them very angry on social networks), there will be many others who are jumping through the hoops (and surely they will be less noisy) and accepting that the shared account hustle is over and that it is time to assume the cost that the company now proposes to continue accessing its catalogue. That is, no matter how much some leave, others who were already there but did not pay now will. As José Mota would say, “the chickens that enter through the ones that are leaving”. And, furthermore, they count on many of those who leave, sooner or later, to end up getting annoyed and return to the fold.

The question that we can throw into the air is if, as they believe, they have the muscle to pitch every week, or every month, “on a ‘Wednesday'”, that is, a product that becomes a phenomenon that everyone wants to see and that “forces” us to subscribe or if, in reality, phenomena like ‘Wednesday’ occur, in part, because we were subscribed to Netflix for defect and we let ourselves be carried away by the tide. Or if ‘Wednesday’ or ‘The Squid Game’ are the norm or the exception. In other words,how many Netflix series will have the ability to make us take out our credit card to subscribe if we have already left?

Spain or Netflix, who has the upper hand?

But does this mean that the “battle” is lost for the user? Not much less. The clue to understand that Netflix does not have them all with it is that the implementation of this great change has been planned gradually and outside of its main territory, the United States. If they didn’t have any kind of fear, they would have started there or simply activated it all over the world at once. Instead, they first tested it in some regions of Latin America and have now added it to Spain, Portugal, New Zealand, and Canada.

The first three are small countries, although we can assume that they are representative of the market dynamics of Western countries, while we can understand Canada as the most similar to the US without taking a chance with the US yet. Depending on the outcome in these four countries, Netflix will make global decisionsto one side or the other. Do we Spanish users now have the upper hand and a rout could cause Los Gatos to panic and back down? Maybe yes, maybe no.

Other issues to consider

Along with the issue of shared accounts, which is certainly taking over the conversation, there are other changes regarding Netflix that are interesting to consider. According to media reports such as cordcuttersnews, the company has lowered its price in some countries, in which it is considered that it is not yet well established They have room for growth. In this way, in Croatia, Albania, Slovenia, Bosnia, Herzegovina, Serbia, North Macedonia, Slovakia and Bulgaria, as well as in Central America, there has been a decrease in prices (in the Balkans the basic plan has gone from €7.99 to €4.99, the standard from €9.99 to €7.99 and the premium from €11.99 to €9.99). Although there is no news that this change will spread to more parts of the world, it is a sign that Netflix continues to readjust its price, either up or down, according to the mandates and needs of the market.

On the other hand, many analysts suggest that another big recent platform change, the cheap version with ads, has been a real failure. Greg Peters defended himself by saying that it was early to draw conclusions of this type and that things are going more or less according to forecasts, although he added that “We have a lot of work, there is no doubt. We will be busy working on this for the next few years “. Along with this defensive position of the CEOs of the company, other information comes to us from Australia. The Sydney Morning Herald points out that advertising market sources say that Netflix is returning the money to Australian advertisers for fear of not being able to fulfill the agreements signed; In other words, your ad-supported service isn’t reaching enough people to show the ads you closed, and you’re recalibrating the issue.

Thus, although Netflix tries to appear strong (and it can do so because, today, it is the only great platform that gives benefits), it is still true that lives, at least, a period of transition in which there is a lot at stake. For the moment, until we see that they close the faucet of shared accounts in the United States, let’s not consider that chapter closed.