Netflix Confirms a Cheaper Ad-Supported Plan is Coming

Tagged with

• Netflix

Share post

• dftf

  25 June, 2022 - 6:49 am

  <p>Not everyone can afford to pay for various streaming-services, especially when there are now so-many of them, and especially right-now, during the current Western-world inflation crisis, too.</p><p><br></p><p>So while I’m glad to see a "paid-for-by-adverts" option added, remember those adverts are mostly paid-for by companies. And with rising costs (especially in energy and fuel), and sales dropping as people and other businesses cut-back, I’d imagine spending on ads will also see drops. So if <em>Netflix</em> were to see many customers switch to this new option, they could actually lose money if the ad-spend doesn’t make up for sub losses.</p><p><br></p><p>(It would be interesting to see a breakdown for some platforms, such as <em>YouTube </em>or<em> Spotify</em>, how much money they make from the sub side versus the ad-supported side.)</p>

  Log in to Reply

• wright_is

  Premium Member

  27 June, 2022 - 7:54 am

  <p>I agree, and in some regions, the stuff that is paid for on Netflix, HBO, Disney etc. is free-to-air, if you wait. For example, RTLII free-to-air channel has the rights to Game of Thrones in Germany.</p><p><br></p><p>They are getting to the point, where they are running out of people in countries that are used to paying for content and trying to ramp up subscriptions in countries where people don’t expect to pay a monthly fee for TV content.</p><p><br></p><p>The younger generation is a little different, here in Germany, but many of the older generations (30+) have had free content (except for the annual TV license, which pays for 2 public channels, much like the TV license in the UK).</p><p><br></p><p>Given the relative lack of expendable income and rising inflation, it is unlikely that such countries will create that much interest. Free with adverts, yes. Paid without adverts, yes. Paid with advert, no.</p><p><br></p><p>Also, as soon as the adverts appear on TV, most people I know channel hop until the adverts are over, then switch back to the channel they were watching.</p>

  Log in to Reply

• grbreiu

  25 June, 2022 - 8:17 am

  <p><span style="color: rgb(0, 0, 0);">&gt; We’re adding an ad tier for folks who say, ‘Hey, I want a lower price and I’ll watch ads,’</span></p><p><br></p><p><span style="color: rgb(0, 0, 0);">No one says that.</span></p>

  Log in to Reply

• sglewis

  30 June, 2022 - 7:13 am

  <p>Hulu. HBO Max. Discovery+. Paramount. Peacock. Many others. You may not say that. But it would appear many do. Or they’d stop offering it and others would stop introducing it. </p>

  Log in to Reply

• mattbg

  Premium Member

  25 June, 2022 - 11:28 am

  <p>Streaming dynamics are changing.</p><p><br></p><p>It’s not a very profitable business. Netflix is one of the few that have to make it stand on its own merits.</p><p><br></p><p>Other companies were alarmed by Netflix’s market share and got into it. Despite not being a good business, the market was rewarding Netflix and were tolerating low profits and high debt on account of streaming being the way of the future.</p><p><br></p><p>But… Netflix is now down 70% or so in market cap from its recent highs. They are having to implement more cost controls, cost-cutting, and more selectivity in what they fund.</p><p><br></p><p>So, the market is no longer rewarding Netflix. They want to see profits once growth has tapped out. This will affect the value equations of everyone else involved in streaming indirectly.</p><p><br></p><p>So, adding ads to subscriptions at a lower price point will give people a way to subscribe to Netflix and improve profitability. Getting a better handle on account sharing is another dimension.</p><p><br></p><p>What can the others do? Raise prices. Netflix is giving them room to do that.</p>

  Log in to Reply

• hrlngrv

  Premium Member

  25 June, 2022 - 7:13 pm

  <p>The cynic in me wants to see the pricing in writing, else said cynic would figure the current price would apply to ad-supported service going forward with ad-free incurring a price increase.</p>

  Log in to Reply

• oscar1

  27 June, 2022 - 5:05 am

  <p>That won’t help against subscription fatigue that is the root cause of dwindling market share.</p><p><br></p>

  Log in to Reply

• compuser

  27 June, 2022 - 4:53 pm

  <p>"The report also mentioned that Netflix plans to implement new measures before the end of the year to prevent subscribers to share their passwords outside of their households."</p><p><br></p><p>I wonder how many subscribers they’ll lose because of this. I know a few people, not in the same household as each other, who share a Netflix subscription and split the cost, because they either think Netflix is way over priced (I agree with this, even though I do subscribe.) or they just can’t affort it on their own.</p>

  Log in to Reply