Streaming giant Netflix is considering a revamp of its business model after the company noticed a sharp drop in subscribers. The new strategy will reportedly include two major changes: using ads for low-cost subscriptions and enhancing password control.

Netflix, based in California, estimated that the streaming service is being used for free in nearly 100 million households across the world. Reed Hastings, the CEO of Netflix, said in a statement, “We have just got to get paid at some degree for them.”

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Netflix offered no additional information about how a cheaper ad-supported service tier would work or how much it would cost.

Rival streaming companies such as Hulu, which is majorly based in the United States, have long offered an ad-supported version of the service.

What changes are expected?

To prod more people to pay for their own accounts, Netflix indicated it will expand a trial program it has been running in three Latin American countries — Chile, Costa Rica and Peru.

In these locations, subscribers can extend service to another household for a discounted price. In Costa Rica, for instance, Netflix plan prices range from $9 to $15 a month, but subscribers can openly share their service with another household for $3, according to reports from Associated Press.

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While Netflix clearly believes these changes will help it build upon its current 221.6 million worldwide subscribers, the moves also risk alienating customers to the point they cancel the service.

How many subscribers did Netflix lose?

In the most recent quarter, Netflix lost 640,000 subscribers in the United States and Canada, prompting management to point out that most of its future growth will come in international markets. Netflix ended March 2022 with 74.6 million subscribers in the United States and Canada, according to reports from Associated Press citing data released by the company.