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BUSINESS Thursday 21 april 2022
As shares plunge, Netflix takes aim at password sharing

By MICHAEL LIEDTKE help it build upon its current
SAN FRANCISCO (AP) — A 221.6 million worldwide sub-
sharp drop in subscribers scribers, the moves also risk
sent Netflix shares into freef- alienating customers to the
all Wednesday, forcing the point they cancel.
company to consider ex- Netflix was previously stung
perimenting with ads and by a customer backlash in
-- hold onto your remote 2011 when it unveiled plans
-- cracking down on mil- to begin charging for its
lions of freeloaders who then-nascent streaming
use passwords shared by service, which had been
friends or family. bundled for free with its
Looming changes an- traditional DVD-by-mail
nounced late Tuesday service before its interna-
are designed to help Net- tional expansion. In the
flix regain momentum lost months after that change,
over the past year. Pan- Netflix lost 800,000 subscrib-
demic-driven lockdowns ers, prompting an apology
that drove binge-watching from Hastings for botching
have lifted, while deep- the execution of the spin-
pocketed rivals such as Ap- off.
ple and Walt Disney have Tuesday's announcement
begun to chip away at its was a sobering come-
vast audience with their This Aug. 13, 2020, photo shows a logo for Netflix on a remote control in Portland, Ore. down for a company that
own streaming services. Associated Press was buoyed two years ago
Netflix's customer base fell when millions of consum-
by 200,000 subscribers dur- midday Wednesday. If the pay for the four in our fam- pand a trial program it ers corralled at home were
ing the January-March stock closes at this level, ily, even if it was more," he has been running in three desperately seeking diver-
quarter, the first contrac- the selloff will have wiped said. "We love the service Latin American countries — sions — a void Netflix was
tion the streaming service out nearly two-thirds of and what it offers." Chile, Costa Rica and Peru. happy to fill. Netflix added
has seen since it became Netflix's market value since The Los Gatos, California, In these locations, subscrib- 36 million subscribers during
available throughout most the end of last year, erasing company estimated that ers can extend service to 2020, by far the largest an-
of the world other than Chi- $170 billion in shareholder about 100 million house- another household for a nual growth since its video
na six years ago. The drop wealth in less than four holds worldwide are watch- discounted price. In Costa streaming service's debut in
stemmed in part from Net- months. ing its service for free by us- Rica, for instance, Netflix 2007.
flix's decision to withdraw The impact on current Netf- ing the account of a friend plan prices range from $9 But Hastings now believes
from Russia to protest the lix customers won't be clear or another family member, to $15 a month, but sub- those outsized gains may
war against Ukraine, result- for some time. To David including 30 million in the scribers can openly share have blinded manage-
ing in a loss of 700,000 sub- Lewis in Norwalk, Connecti- U.S. and Canada. their service with another ment. "COVID created a lot
scribers. Netflix projected a cut, it's doesn't seem like "Those are over 100 million household for $3. of noise on how to read the
loss of another 2 million sub- a big deal. Lewis shares a households already are Netflix offered no addition- situation," he said in a video
scribers in the current April- premium plan with his three choosing to view Netflix," al information about how a conference Tuesday.
June quarter. adult children and some of Netflix CEO Reed Hastings cheaper ad-supported ser- Netflix began heading in
The steep erosion, which their friends and says they said. "We've just got to get vice tier would work or how a new direction last year
follows a year of progres- will keep it, even if they paid at some degree for much it would cost. Anoth- when its service added vid-
sively slower growth, has have to cut off the friends them." er rival, Hulu, has long of- eo games at no additional
given Netflix investors major and each pay for their own To prod more people to fered an ad-supported tier. charge in an attempt to
jitters. The company's stock accounts. pay for their own accounts, While Netflix clearly be- give people another rea-
was down as much as 37% "We would keep Netflix and Netflix indicated it will ex- lieves these changes will son to subscribe.q

IMF, World Bank chiefs warn of debt squeeze in poor nations

By PAUL WISEMAN mounting on developing distress'' — an alarming government debts in low- ports and freight yards. De-
AP Economics Writer countries, and we need to threshold reached when income countries will sur- liveries slowed and prices
WASHINGTON (AP) — The move urgently towards so- their debt payments equal pass 50% of gross domestic rose.
heads of the Internation- lutions.'' half the size of their national product — the broadest The IMF now forecasts that
al Monetary Fund and Malpass said the "debt cri- economies. Countries that measure of economic out- consumer prices will jump
the World Bank warned sis'' is a topic of extensive strain to pay their creditors put — this year, up from less 8.7% this year in emerging-
Wednesday that rising in- discussion' at this week's will also struggle to help than 44% in the pre-pan- market and developing
terest rates are squeezing Spring meetings of the their poorest citizens at a demic year 2019. countries and 5.7% in ad-
the world's poorest coun- World Bank and IMF, al- time when the Ukraine war Globally, the massive vanced economies, most
tries as they struggle with ready dominated by other is disrupting food shipments economic assistance has since 1984.
the coronavirus and soar- daunting issues includ- and pushing food prices worked, fueling an unex- In response, the world's
ing food prices. ing the war in Ukraine, the higher. pectedly quick recovery central banks — led by
There is "a huge buildup coronavirus pandemic and Countries around the world from 2020's pandemic re- America's Federal Reserve
of debt, especially in the a slowing global economy. piled on debt to shield their cession. — are raising interest rates
poorest countries,'' World IMF managing director economies from the ravag- But the rebound caught to combat rising prices.
Bank President David Mal- Kristalina Georgieva told es of the coronavirus pan- businesses by surprise. They Higher rates will increase
pass said in a press con- reporters Wednesday that demic and the lockdowns scrambled to meet surging the debt burden — most
ference. "As interest rates 60% of low-income coun- meant to contain it. customer demand, which painfully in the world's poor-
rise, the debt pressures are tries were in or near "debt The IMF forecasts that overwhelmed factories, est countries.q