San Francisco - An unexpected drop in subscribers has forced Netflix to consider experimenting with ads and crack down on millions of freeloaders who use passwords shared by friends or family.

The surprising net loss of 200,000 subscribers rattled investors, who had been told by the company to expect a gain of 2.5 million subscribers. Netflix shares sank 35% on the news, falling to their lowest level since early 2018.

Netflix has already been experimenting in Latin America with programs that use a soft touch to convince the unsubscribed to sign up. In Costa Rica, for instance, Netflix plan prices range from $9 to $15 a month, but subscribers can create sub-accounts for two other individuals outside their household for $3 a month. On Tuesday, Hastings suggested that the company may adopt something similar in other markets.

Some current subscribers say even a gentle push to reduce password sharing might push them to sign off.

Netflix is looking at more subscriber losses. The company predicted its customer base will shrink by another 2 million subscribers by the end of June.

The crackdown on password sharing could be more problematic. Ads, meanwhile, has long viewed as a distraction from the entertainment Netflix provides.

Netflix last year when its service added video games at no additional charge in an attempt to give people another reason to subscribe.
-AP