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this post was submitted on 10 Jun 2023
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Technology
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A spike in subscribers for a period doesn't necessarily mean they're making more money than before, even if the number of new signups offsets the cancellations.
I used to pay for the Premium plan, sharing with my parents, but downgraded to the Basic plan. My parents ended up getting their own Basic plan. So a single account essentially split into two, but the sum of both payments is now less than what it used to be for the single account. So Netflix gained an extra subscriber, but is now making less money from that pool of users.
It's totally possible that some number of these new signups consist of people who did the same thing. It could even be that some number of these new signups are people who joined because others who were sharing with them closed their own accounts.
Basically, seeing a spike in new signups isn't itself a measure of success.
As Netflix tested these changes in other parts of the world first, they had sufficient metrics to know how this change will affect their user-base. They are expecting an increase in subs and in income.
I cancelled my sub (4 screens), which was shared among 5 people. Two of these decided to resubscribe by themselves, although not in the 4 screens configuration. From my calculations this means:
I think this matches their "100% increase in subs" metric. The only question is how many others who resubscribe will go for the 2 screens (Standard) sub, or the 1 screen (Basic) sub. With basic, the same situation would result in a ~2EUR decrease in revenue.