Why Is Netflix Getting Rid of Its Most Profitable Customers?
It may seem like an inconsequential story at first. Netflix (NASDAQ: NFLX) is shutting down dormant accounts, even as they continue to pay their monthly subscriptions. The world's leading premium streaming platform is now reaching out to folks with current accounts who haven't been consuming content for a year since joining the service and shutting them down if they don't respond. Netflix will also be checking in on customers who have stopped watching for more than two years.
Companies often seek out the biggest drags on their business models and weed them out. Some internet providers and wireless carriers will slow you down if you consume too much bandwidth in any given billing period. Credit card companies will gun for churners who gobble up lucrative signup offers and move on to the next card by rejecting applicants who have had too many recent credit inquiries. Insurers will jack up the rates of folks who file too many claims or take too many chances. Netflix is going in an entirely different direction here. It's booting its most profitable customers. This is a ridiculous move, but it's also a brilliant one.
The cast of Sense8. Image source: Netflix.
Source Fool.com
