Netflix will start automatically canceling accounts that haven't been used in over a year. The company will first ask these users if they'd like to keep their subscriptions, and if no response is received, the account will automatically be closed.
Netflix says the alerts will be delivered to inactive customers through app notifications and emails.
That's some bravado — There's basically nobody questioning Netflix's worth. People can't get enough of Netflix and new series' like "The Last Dance" are keeping everyone entertained during this shelter-in-place period, so the company isn't too worried about seeing any massive decline in subscriptions as a result of these automatic cancellations. Even the company's regular price hikes don't seem to slow the company's growth down despite complaints.
The move is contrarian to most recurring subscription businesses, which are more than happy to keep taking your money even if you stop using their product. Just take gyms, for instance. They make their money when paying members don't show up because it means their equipment isn't being worn down.
Netflix says that inactive accounts represent less than half of one percent of its overall users. The company plans to start notifying idle users right away, it said in a blog post:
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. If anyone changes their mind later, it’s really easy to restart 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.
The company has gained a ton of new subscribers as a result of coronavirus as well. Before COVID-19 hit, Netflix expected to gain 7 million new subscribers in the first three months of 2020. Instead it got 15 million. It now has more than 182 million paying users worldwide.