Netflix carried out an important change in your billing model in Spain, going from invoicing through a subsidiary located in the Netherlands to doing it directly in the country. The company had been using this method since its arrival in Spain in 2015, a strategy that allowed it to pay less taxes.
now netflix has had to pay 1.7% more than in 2020 in Corporation Tax, specifically 2.7 million euros. Nevertheless, the famous platform has managed to bill 579 million euros in 2021, which represents a figure 17 times higher than that obtained the previous year. And this has not been the only result obtained after the change of model, since Netflix’s net profit soared 468% reaching 8.69 million euros.
The main producer of Netflix in Spain increases its turnover by 50%
The excellent streak that Netflix is experiencing in Spain is also extrapolated to its production companies, especially to The Cats Entertainment Spain. This is the main producer of the company in the country, a fact that has been reflected thanks to its large increase in turnover (50%) after reaching 17.7 million euros.
In addition, the net profit obtained by the producer (almost 1.3 million euros) have practically doubled the figure for 2020. Likewise, thanks to the successes achieved, they have increased their workforce to 50 workers.
Netflix shares plummeted in April after announcing the exodus of its subscribers
The great empire of Netflix was threatened for the first time in its 10-year history. Although this streaming giant managed to change the way we consume video content and digitized a business vertical with an innovative vision that few trusted, it is not going through a good time: Netflix is already lost 200,000 subscribers during the first three months of 2022, a figure that rose to 970,000 in July.
This first loss fell like a bucket of cold water to its shareholders: the company had to face a 28% crash in the stock market and lose around 40,000 million dollars (about 36,800 million euros) of its market value.
It is also necessary to highlight the causes that triggered that, for example, they decided to definitively disconnect from their service in the US and Canada, while every day more users consider this option worldwide, a trend that could cause concern in the medium or long term.
The war, prices and third-party content: reasons why Netflix has lost millions of subscribers
there are two factors that have contributed to the loss of its users: firstly, that raised their prices in the key markets of the United States and , and secondly his response to the invasion of Ukraineas the company withdrew its services from Russia, costing it about 700,000 subscribers.
“The suspension of our service in Russia and the progressive decrease in the number of Russian paid subscribers led to a net loss of 700,000 subscriptions. Without this impact, we would have had an additional 500,000 subscribers”Netflix stated in its statement.
But despite the fact that Netflix mentions these two factors, we must remember that the company, which previously practically covered the entire market, it now faces stiff competition from big media companies that have launched their own video streaming subscription services such as Disney +, HBO, Paramount or Warner, among others, who join large technology companies that also want a piece of this market, such as Apple TV or Amazon Prime Video.
And precisely this withdrawal of the big audiovisual companies has motivated less content on Netflix: as the big producers saw the big business it represented, they recovered the rights of some of their titles with the largest audiences to offer them on their own channelsas is the case with the great library of Disney and Marvel, or Friends and The Office, two of the most successful series of all time that have migrated in recent months.
Of course, this scenario has not been ignored by Netflix, which is making an effort to counteract it, however, not all of its efforts bear fruit and not all of its creations manage to monetize adequately.
Don’t share your password!
In this context, Reed Hastings, co-founder of Netflix, who they were aimed both at attracting more users and at moderating the revenue loss caused by account sharing.
The first of his efforts set his sights on the 30 million people who shared his account in the United States and Canada, and millions more around the world.
“Netflix titles are very popular globally. However, our relatively high penetration in households, when included the large number of shared accounts in households, which combined with competition, is creating difficulties for revenue growth”Netflix assured in its note to investors.
In fact the measure against the practice of sharing login information with family or friends already applied, Costa Rica and Peru. A strategy that could be applied globally at the end of 2022 or the beginning of 2023.
This strategy includes new payment plans for those who want to continue sharing their password with users who do not live in the same house. And, when users in the same household use Netflix outside of their home, they will be able to verify their device from where they are signed in with the main WiFi, a verification that will be carried out on an ongoing basis.
A free Netflix… but with ads
One more of Netflix’s efforts will be the creation of a free account that includes advertisements, a strategy that Disney and HBO are already testing in some markets. And, while it may be an annoying inclusion for many viewers, it really could be. a medium and long-term solution to maintain revenue and attract more viewers.
“Those who have followed Netflix know that I have been against the complexity of advertising and am a big fan of the simplicity of subscription.said the executive director. «But as much of a fan of that as I am, I’m a bigger fan of consumer choice.”
So we could soon find an ad-cut version of Netflix, which will taste more like broadcast TV, but could be a lifesaver for the streaming giant. Which of their services would you be willing to hire?
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