The streaming wars have been raging for some time now in the world of entertainment, and they’re not going to get any less intense any time soon. Netflix and Amazon Prime are no longer the only players in town.
They have Apple TV and CBS All Access to worry about, too, and HBO Max is swinging into action. They’re already very worried about Disney Plus, which went from zero to fifty million subscribers in almost no time at all after launching toward the end of 2019.
With so much competition around, we would normally expect every company involved to hold on greedily to every customer they have. To our surprise, Netflix isn’t doing that.
The reason the competition between all the different providers is so tough is that they all provide a service that’s essentially identical.
They stream thousands of choices of television shows and movies across the internet via one access point to the screen of the customer’s choice. It’s an idea that was first demonstrated successfully on the internet by online slots websites like Rose Slots. As technology advanced, they quickly realized that they could replicate the games found in physical cabinets inside casinos, turn them into online slots, and then place them on the internet for customers to access and play with.
Why Netflix Starts Closing Disused Customer Accounts?
In almost no time at all, online slots started generating massive amounts of revenue. Companies like Netflix took note and replicated the idea with films, and that led to the entertainment revolution we’re all enjoying today.
As the number of companies involved in the streaming wars grows, it will presumably have an impact on the number of people subscribing to each service. People don’t have limitless amounts of disposable income, and so they’ll only subscribe to the services that interest them the most. Netflix has already probably lost a few customers to Disney Plus.
Disney Plus will probably drop a few subscribers that HBO Max will pick up. All of the major services will score customers from each other, and the least popular of them will eventually be left with insufficient numbers of subscribers to turn a profit. That’s how all business contests work, and this will be no different. It’s therefore quite extraordinary for Netflix to start closing accounts and ceasing to charge people deliberately.
The extraordinary idea, which was announced during the third week of May, comes after the company noted that they have ‘thousands’ of users who still pay for their monthly subscription, but haven’t used the service for a year or more.
Some of those customers have never watched a single show or film on Netflix from the moment they signed up.Netflix Starts Closing Disused Customer Accounts
It’s feared that some of the owners of those accounts may have passed away since registering, but others may have forgotten they pay for a Netflix subscription and don’t notice the debit coming off their bank account or credit card each month. Netflix has now decided that it’s unethical to continue charging people who don’t get anything for their money and will start canceling those accounts immediately.
Anyone who has an account that hasn’t been used for a year or more will shortly receive an email reminding them that they’re a paying Netflix customer, and asking them if they would like to continue using the service. If they don’t reply to that email and confirm that they want their subscription, Netflix will cancel it. While deliberately cutting away thousands of paying customers might seem like insanity from a business point of view, Netflix can afford to do it.
Netflix Account Updates
As was confirmed when the company posted its 2020 first-quarterly earnings report, there are currently over one hundred and eighty million people paying for Netflix. Although they haven’t said exactly how many people are currently at risk of having their accounts closed, they’ve confirmed that the total figure amounts to less than half of one percent of their whole customer base.
While it’s admirable that a company would look after delinquent subscribers this way (and save them money in the process), it’s unlikely that Netflix is doing this purely to ‘be nice.’
The war between the competing streaming companies isn’t only about product range and price – it’s also about public image. By doing this, Netflix is positioning itself as the good guys in the battle.
They’re telling people that they don’t just care about money, they care about people – and if they think people aren’t getting value out of the money they receive in subscription fees, they’ll stop those payments. It’s undoubtedly the right thing to do from a moral point of view, but it’s also an excellent move from a public relations point of view.
Having announced this move (and gained a significant amount of positive press coverage in the process), Netflix has thrown the gauntlet down to all of its rivals to follow suit. Any of them could do what Netflix has done without causing significant damage to their bottom line, but only one company can be the first to do it. In that respect, Netflix has stolen a march on them.
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They now have to confirm that they’ll do the same thing as Netflix, or they’ll look mean-spirited and money-orientated by comparison. We imagine that conversations about how to implement such a move and when to announce it are taking place within the boardrooms of Disney Plus, Amazon Prime, and all the rest as we speak.
Netflix Starts Closing Disused Customer Accounts, All You need to know
We have no way of knowing whether Netflix will be the biggest name in the entertainment streaming business a year from now, but they were the first big name in the field, and they intend to stay that way. By making moves like this, they’re reminding everybody else who invented the game, and what they have to do to keep up.
Positive or negative publicity might ultimately count for everything in the streaming wars, so we should look out for other customer-friendly moves in the near future. That’s always the major positive of a situation like this – when companies go to war for subscribers, the customers usually end up getting better deals because of it!
The more companies there are in the fight, the better the deals on offer are likely to become. Would it be unrealistic to expect someone to offer a limited ‘free tier’ in the near future? Right now, that might be a step too far, but you never know what might be around the corner.