Netflix is taking the altruistic measure of helping inactive subscribers cancel their accounts as the ongoing coronavirus pandemic causes lots of economic uncertainty.
The company said it will begin asking members who have not watched anything on Netflix for multiple years to confirm that they still want their accounts. Members will start seeing emails or in-app notifications this week and if they don’t confirm that they want to keep subscribing, Netflix will automatically cancel their subscriptions. The company will keep these accounts’ favorites, profiles, viewing preferences and other details on hand for 10 months so they can be restored for any accounts that rejoin.
“If anyone changes their mind later, it’s really easy to restart Netflix,” said Eddy Wu, director of product innovation at Netflix. “These inactive accounts represent less than half of one percent of our overall member base, only a few hundred thousand, and are already factored into our financial guidance.”
Even if Netflix does end up canceling a few hundred thousand streaming accounts, it won’t make much of a dent in the company’s overall subscriber base. The company added 15.77 million new paid streaming subscribers during the first quarter. That figure dramatically exceeded the 7 million net additions that Netflix had forecast. The company ended the quarter with 182.86 million paid subscribers.
Most Americans were under stay-at-home orders throughout March, April and May due to the pandemic and it caused huge increases in time spent streaming video. With those orders now beginning to lift for many around the country, streaming services like Netflix will likely see their engagement and subscriber growth totals begin to decelerate.
“Like other home entertainment services, we’re seeing temporarily higher viewing and increased membership growth,” wrote Netflix in a letter to shareholders. “In our case, this is offset by a sharply stronger U.S. dollar, depressing our international revenue, resulting in revenue-as-forecast. We expect viewing to decline and membership growth to decelerate as home confinement ends, which we hope is soon.”