Streaming giant Netflix is making significant changes to its financial strategies, including a $300 million spending cut and a delay in implementing measures to crack down on password sharing. The company had initially planned to address password sharing in the first quarter of this year but has pushed it to the second quarter, resulting in a shift in expected revenue to the latter half of the year. While Netflix is urging staff to be prudent with spending, it clarified that there will be no hiring freeze or additional layoffs. However, the company is reducing its spending in various areas to optimize costs.
The decision to curtail expenses comes as Netflix looks to manage its budget more efficiently and streamline operations.In addition to the adjustments in spending, Netflix is introducing new subscription plans and upgrading existing ones. The company launched a new ad-supported plan called ‘Basic with Ads’ in November last year, priced at $6.99 per month. This move allows Netflix to cater to a wider audience by offering a more affordable option. The ad-supported plan is now being enhanced in terms of streaming quality and concurrent streams, providing subscribers with an improved viewing experience. Moreover, Netflix intends to tackle password sharing in the United States during the summer. The forthcoming feature, called “paid sharing,” will enable account holders to add up to two extra members per account at a fee per additional user, varying by country.
The sharing plans will be available to Standard ($15.49 per month) and Premium ($19.99 per month) subscribers, giving them flexibility and accommodating different viewing preferences. While these changes aim to optimize revenue generation and cost management, it is worth noting that Netflix conducted job cuts in the previous year as part of its efforts to reduce expenditures. These strategic adjustments reflect the company’s ongoing commitment to adapting its operations and offerings to meet the evolving needs of its global subscriber base.