Netflix Killing Cheapest Subscription Tier Forever
When companies have an incredible year, pull in record-setting profits, and are lauded at award shows, there’s a naive belief that the customers will ultimately be the ones to benefit. As Netflix has proved, that is not the case, with a new report that the world’s largest streaming company will soon stop supporting the $12.99 Basic tier. This is notable as the Basic tier is the cheapest way to enjoy the service without ads.
Anyone That Had Basic Will Have It Taken Away
Netflix removed the Basic tier for new and returning subscribers already, but this latest move will force anyone who has held onto their plan to move to another tier. The new cheapest ad-free tier will be the Standard, at $15.49 monthly. Users could also opt for the ad-supported tier, at $7, though history has shown that it is likely to increase in price soon.
Ads Are Big Business For Netflix
This last quarter, Netflix reported that ad membership was up 70%. Greg Peters, co-CEO of the company, explained that they will now be working on improving targeted ads and developing more ads that reward viewers with an ad-free episode. That’s in addition to securing more sponsors, and the eye-popping numbers shared during the investor call explain why the streamer is making a pivot to advertisements.
The Ads Plan Is Popular
Ad-supported plans stand at 23 million monthly users. After the last round of price hikes, Netflix had 13.1 million new subscribers, and in areas with the ad-plan option, 40% of them opted for the ad-supported tier. In total, Netflix reported 260 million active users.
Netflix Admits More Price Hikes Are Possible
An executive said during the call, “we’ll occasionally ask our members to pay a little extra.” Considering Netflix spent hundreds of millions to develop Zach Snyder’s Rebel Moon and, more recently, committed to air WWE’s flagship Monday Night RAW live on their service, it’s clear where all the ad money is going. Most of Netflix’s original content fails to find an audience, but it becomes a massive success when something hits, as last year’s One Piece live-action adaptation did.
Is A Live Tier In The Works?
The addition of WWE Monday Night RAW, a weekly, live show, is unlike anything else in the history of Netflix. Occasional F1 races, or stand-up specials, have been live, but not on the same scale. The NFL found success with a streaming-only playoff game on Peacock, and it’s no longer crazy to think that a future Super Bowl might be locked behind a Netflix paywall.
Cheap Tiers May Be Dying But Premium Is Here To Stay
The highest tier of Netflix viewing allows users to share with two people, use four devices at once, and watch programs in Ultra HD, for when you want to count Ross’s nose hairs on Friends. At $23 a month, it’s an investment, which is why most of the users are sticking with Standard and Standard-with-ads. For a company that recently had a financially disastrous year in 2022, Netflix is playing chicken with its users and pricing, so who will drive off the cliff first?
