LONDON: Netflix is planning to introduce new features to retain its viewers and curb its subscriber decline after data showed users were visiting the platform less often, sources close to the matter revealed on Monday.
Co-CEO Reed Hastings asked staff to develop new methods to increase the frequency with which subscribers access the platform after the company expressed concern about declining site visits.
The streaming giant is reported to be working on new features which focus on valuing the platform’s existing content, most of which consists of programs between smash hits and flops.
One of these features includes a revamp of its “surprise me” feature, which currently suggests something wholly unrelated to a person’s previous watching choices. As a result of one potential change, users would be asked to select the genre of the surprise content that would be recommended.
Over the last few years, Netflix, which has long analyzed its members’ behavior across the platform, has invested heavily in finding new ways to track viewer metrics and understand user habits to feed them relevant content.
But while these metrics have been predominantly used to expand the subscriber base, the company is looking more closely at how this data can inform best practices to make its users return to the platform more often.
“They can no longer rely on adding 20 million new subscribers. So they have to focus on not losing 20 million subscribers,” commented Michael Pachter, an analyst at US-based investment firm Wedbush Securities.
People familiar with the matter said that the company is concerned with the fact that the decline in visits would make it more likely that customers would cancel their subscriptions, and is focused on finding new ways to make existing content more relevant to them.
This is particularly true for content the streaming platform deems “sticky,” which are programs that have been watched for at least 75 minutes over the course of 28 days and that the company believes could encourage viewers to return to the platform more often.
This emphasis on driving users back to the platform comes at a crucial moment for the streaming giant.
Netflix is expected on Tuesday to reveal performance figures for the latest period. After losing subscribers in the first two quarters of the year — in a historic first which caused the shares to plunge about 60 percent — it has told investors it expects to add 1 million subscribers in the third quarter.
Although Netflix is expected to mitigate a difficult first half of the year, the streaming giant is looking at longer term solutions, particularly as market competition intensifies with global players such as Disney+, HBO Max, Amazon Prime Video, and in the Middle East and North Africa region Starzplay and the recently revamped OSN+, fighting for a share of an already crowded market.
The latest speculation comes as the company prepares to launch its new ad-supported tier called “basic with ads” scheduled for the Nov. 3, through which Netflix hopes to generate more income.
Several sources also anticipated earlier this year that the company is considering a crackdown on password sharing after Hastings hinted at possible ways to monetize it.
Although preventing password sharers was not a big priority when Netflix was adding new subscribers every month, the company changed its stance and said it has been testing ways to get an estimated 100 million homes that access the service through this password sharing to pay up.
Netflix’s decision to focus on retaining members comes as the “watch, cancel and go” trend, a practice where viewers switch between platforms in order to save money, changing subscriptions depending on which service hosts the shows or movies they want to watch at the time, becomes increasingly popular among viewers.
This trend poses a serious threat to even the largest companies in the sector, with experts claiming that attracting new customers is five times more expensive than retaining loyal subscribers.