Netflix Reportedly Doubles Ad-Supported Plan Sign-Ups in January Starting Positive Trajectory for Pricing Option
FEB 3, 2023, 7:32 AM PST – David Satin
Streamable
Netflix got yet another lesson in the capricious nature of the media over the last several weeks. In late December, news began to trickle out that its new ad-supported tier “Basic with Ads” was off to a slow start for the company. Basic with Ads launched in November, and was the least-popular signup option for Netflix that month.
But then Netflix’s fourth-quarter earnings report was released, and suddenly everything was sunshine and roses again. The company far outpaced its new subscriber projections, adding a total of 7.66 million users to bring its global total to over 230 million.
Now, the company is celebrating good news once again. As first reported by The Information, Netflix is telling advertisers it doubled the number of new sign-ups on the Basic with Ads plan in January, as compared to the number of new users the tier attracted in December. Netflix did not release specific numbers, but it looks as if the new ad-supported plan is finally starting to gain some traction for the streamer.
The doubling of sign-ups for Netflix’s Basic with Ads plan is a good start, but it should be regarded as a baby step for the streamer. The service reportedly told advertisers it expected to amass 1.75M Basic with Ads users by the end of its first quarter in existence, or roughly 2.4% of its North American subscriber base. Some estimates have shown that by 2027, Netflix could have nearly 60% of its users on the ad-supported plan, but it still has a long way to go before it approaches those numbers.
Still, Netflix needed this infusion of good news. This week, news reporting took another turn toward the ugly side for the service. An apparently erroneously posted Help Center page — f irst reported by The Streamable — convinced many that Netflix was unveiling its first domestic plans to put an end to password sharing. Those plans are still forthcoming, but the initial reaction to Netflix’s gaffe was strong and negative when people thought sharing a password might end in their devices being blocked.
Once those measures do go into effect, Basic with Ads might see another new infusion of users. Customers who are discouraged from using someone else’s account may decide the $6.99 per month price point is low enough to subscribe on their own, and many users on higher tiers might decide to downgrade instead of churning away. That’s what the company is likely hoping, and it may confirm that the true value of Basic with Ads is in retaining customers instead of attracting floods of new users.
Time will tell exactly what effects Basic with Ads will have once Netflix hands down its real guidelines for password-sharing in the United States, but for now, executives can breathe a sigh of relief. The company is on the positive side of the news cycle once again.
Netflix Reportedly Doubles Ad-Supported Plan Sign-Ups in January Starting Positive Trajectory for Pricing Option – The Streamable |
