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Netflix (NFLX) stock price was down yesterday but today in the pre-market it is slightly up. Netflix is going to cancel the subscriptions of the accounts that were inactive for a year.
Netflix Inc (NASDAQ: NFLX) stock prices fell by 2.55% in the last trading session. This occurred as the video streaming service has indicated that it will be canceling inactive subscriptions. Netflix stated that the inactive accounts are those that haven’t watched any content in a year.
Yesterday Netflix (NFLX) stock price was $436.25 (-2.55%). Today in the pre-market, NFLX has started to gain. Now it is 0.11% up, at $436.75.
In a statement, Netflix indicated:
“The last thing we want is people paying for something they’re not using.”
Netflix (NFLX) Stock Price Falls after Announcement about Inactive Subscriptions
The company also went on to say:
“So we’re asking everyone who has not watched anything on Netflix for a year since they joined to confirm they want to keep their membership.”
“And we’ll do the same for anyone who has stopped watching for more than two years. Members will start seeing these emails or in-app notifications this week. If they don’t confirm that they want to keep subscribing, we’ll automatically cancel their subscription,” reads the statement.
The company also indicated that it will easy for the users to resubscribe. Personalized data is going to be stored for ten months following such cancellations. Data such as content preferences, bookmarked content and other useful sets are included.
This comes at a time when Netflix has seen a dramatic rise in its business. The shelter-in-place restrictions have increased the viewership of streaming services exponentially.
Pundits think that this move by Netflix will make it to fine-tune its analytics data sets. They also that it will give the streaming service the required edge against new competitors.
Last year saw a large increase in digital streaming services. Services such as Disney+, NBC Universal’s Peacock, Apple TV+, Amazon Prime, and the incoming HBO Max.
Netflix as the industry leader has to meet up with new trends or it will find itself falling behind. This move is set to weed out those who aren’t interested in the service. It will also help determine the overall quality of the offerings.
This Move Will Help People Save Cash
Eddy Wu, director of Product Innovation at Netflix, said:
“In the meantime, we hope this new approach saves people some hard-earned cash.”
This comes as the COVID-19 induced unemployment rates are rising fast. In the United States alone, over 20 million jobs were lost in April.
Many individuals and families will have cash issues. Such a move also shows that the focus is to help families.
In the meantime though, the Netflix Subscriber base is growing. The streaming service had about 182 million subscribers at the end of March alone.
That number is only set to grow even further. The world continues to grapple with the novel coronavirus. New trends and patterns in consumer spending are emerging. One of such is an increase in digital spending.
The age of the cinema may have just come to an end. The rise of digital streaming may be beginning. This is how it starts.