The future of Netflix after loss of users brings a new strategy, what is it about?

After years of conquering its users, the streaming giant Netflix lost subscribers at a rapid rate around the world in the first quarter of this year alone compared to the end of 2021, a news that sent its stock down 25% at the time.

The future of Netflix after loss of users brings a new strategy, what is it about?

The Californian group reacted by announcing the arrival of advertising at its service, which it intends to seek help to finance the necessary investments to maintain its position as leader in the industry.

Speaking to CNN Business , Andrew Hare, senior vice president of research at Magid, said that “there will be hell to pay if they report a figure significantly higher than the 2 million loss being handled. Once Netflix is ​​severely undervalued by the market, all bets are off."

“Investors will give them time to right the ship, but they need to hear stronger plans on the path to immediate growth. It’s about communicating how the business is evolving to ensure they continue to win in streaming. Nobody has the stomach for a business that loses millions of subscribers every quarter,” added Hare.

Microsoft will be the one that will manage the technology for the sale of advertising space in Netflix, which wants to offer less expensive subscriptions but including ads. The decision follows a disappointing first quarter in which they lost around 200,000 subscribers for the first time in 10 years, and comes after several years of resisting the idea of ​​advertising.

The future of Netflix after loss of users brings a new strategy, what is it about?

“Clearly that works for Hulu,” Netflix CEO Reed Hastings had said, referring to a competing service during a conference call with analysts. “If you want the ad-free option, it will still be possible. If you prefer to pay less and tolerate advertising, there will be an option for you too , "added the manager.

This subscription will be added to the three already available (“Essential”, “Standard” and “Premium”), with the cheapest at ten dollars per month in the United States. Microsoft will be in charge of designing and managing the platform for advertisers who want to deliver targeted advertising to Netflix users.

“Microsoft has the proven ability to respond to all of our advertising needs, building with us a new ad-supported subscription offering,” Netflix COO Greg Peters was quoted as saying in the statement.

According to the US specialized press, Netflix had considered other partners such as Google, the world leader in advertising and owner of YouTube, as well as Comcast, an internet provider that owns Peacock, the NBCUniversal platform. Unlike those companies, Microsoft does not have a video streaming service, although it does have services such as the LinkedIn social network and XBox video games.

“ Microsoft gives us the ability to flexibly innovate in the future, both on the technology side and in sales techniques, and also provides strong protections for our subscribers’ privacy,” said Greg Peters.

Introducing advertising means, in effect, exposing yourself to issues debated for years around the personal data of consumers, obtained on a large scale to target more lucrative personalized advertisements to users.

“We are at the beginning, but our long-term goal is clear: more options for consumers and a premium tool for brands, better than linear television,” said the director.