Netflix clearly did a lot of thinking about its future in 2022. The service launched an ad-supported tier in November, in the hopes of boosting its profitability in the coming years. The world’s largest streamer has also been investing heavily in mobile games, hoping to stand out from competitors by offering a different form of popular media on its platform.
But could Netflix’s plans for the future include cutting one of its most popular subscription options? The Netflix sign-up process seems to have changed recently, making it more difficult to sign up for what had been its introductory package before the launch of the ad-supported option in November.
At first blush, Netflix’s sign-up flow on some devices and browsers does not currently include the service’s “Basic” plan, which features ad-free streaming in 720p resolution for $9.99 per month. Potential new users have to scroll down and find the “See all plans” link to be shown the Basic option, meaning that while it is still available to new subscribers, it is effectively hidden from consumers.
Click on Pictures to See What New Subscribers See When Signing Up for Netflix:
It obviously makes sense for Netflix to attempt to push new users toward the “Basic With Ads” plan. The streamer reportedly makes more per user on this plan thanks to the combination of advertising revenue and subscriber fees than the subscription-only Basic tier.
Since the Ad-supported plan costs $6.99 per month, it stands to reason that Netflix makes far more on average than the $3 per month that it gains from users who pick the ad-free Basic plan instead. That makes it all the more crucial for Netflix to highlight the new plan, especially given the fact that it was the service’s least-popular subscription plan during its first month of availability.
Discontinuing the Basic without ads plan would help drive even more users to the new tier. Doing so would mean that Netflix’s Standard plan, at $15.49 per month, would be its cheapest ad-free option. That would go a long way toward helping Netflix monetize its customers to the highest possible degree.
However, before it can think about potentially discontinuing the ad-free Basic plan, Netflix has some kinks to work out of the Basic With Ads offering. For starters, the new price tier is not currently available on all devices, most notably Apple TV streaming boxes. Additionally, Netflix launched the Basic With Ads plan before it had agreed on a formula for sharing ad revenues with all studios, meaning that some series and movies on the service are still not available to users of that tier.
It’s hard to ignore the possibility that Netflix could discontinue its Basic without ads plan once it irons out the issues on the ad-supported version. The service already offers more pricing tiers than every other service outside of the Disney Bundle, and cutting the ad-free Basic plan would help boost each customer’s value to the service, which has quickly become the most important thing to shareholders investing in media companies.
Netflix
Netflix is a subscription video streaming service that includes on-demand access to 3,000+ movies, 2,000+ TV Shows, and Netflix Originals like Stranger Things, Squid Game, The Crown, Tiger King, and Bridgerton. They are constantly adding new shows and movies. Some of their Academy Award-winning exclusives include Roma, Marriage Story, Mank, and Ma Rainey’s Black Bottom.