Netflix to Stop Charging Subscribers Who Don't Watch the Service

In less than a decade, Netflix has become an almost ubiquitous part of many people's media diets, as the streaming platform's popularity only continues to grow. But if you're among those who might not be as active on your Netflix account - or haven't been for a while - it sounds like the streaming platform has a way to help you out. In a letter to investors on Thursday, Netflix revealed that they have set a new system in place to stop billing customers if their account is inactive for too long -- an idea that causes a "slight hit" to the company's revenue, but does help with the brand overall.

“A very small percentage of our members have not watched anything for the last two years and although we make it easy for people to cancel their subscriptions with just a few clicks, they have not taken advantage of that ability,” the letter explains. “So we decided to stop billing them and will do so for members meeting the same criteria going forward.”

“While this change resulted in a slight hit to revenue, we believe that pro-consumer policies like this are the right thing to do and that the long term benefits will outweigh the short term costs," the letter continues. "In a world where consumers have many subscriptions, auto-pause on billing after an extended period of non-use should be how leading services operate.”

Of course, if your billing is paused and you end up wanting to resubscribe, the company stresses that it will be easy to do so. And as those behind the company stress, it will hopefully be a small change that results in more satisfaction among customers in the long run.

“I think of it as, when someone churns, it’s always temporary,” founder and co-CEO Reed Hastings said during an earnings interview posted to YouTube on Thursday. “They’re gonna come back. It’s just a matter of timing as our service gets better, as maybe their income increases, as the internet gets faster. We love people to get a taste of Netflix. We hope they stay for 50 years.”

If new numbers are any indication, Netflix's subscriber base is improving, with the company announcing 10.1 million net new streaming subscribers in its second quarter.

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“We live in uncertain times with restrictions on what we can do socially and many people are turning to entertainment for relaxation, connection, comfort and stimulation,” Netflix said in the shareholder letter.

What do you think of Netflix deciding to stop billing inactive customers? Share your thoughts with us in the comments below!

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