As is often the case, Netflix used the occasion of its first-quarter 2023 earnings report to provide new details on upcoming changes and initiatives. After reporting that it had added 1.75 million customers during Q1, the world’s largest stream confirmed that it would roll out enhanced password-sharing rules in the United States this quarter, which is not likely news that will be embraced fondly by the company’s subscribers. However, Netflix did have some good news for the most budget-conscious of its customers.

As part of the letter to shareholders that the company released on Tuesday, the streaming giant announced that it would be increasing the features of its low-cost Basic with Ads subscription tier which costs $6.99 per month. Due to the fact that the company reports that it is making more money per user on the ad-supported tier, it is making changes to the plan in order to entice more customers to opt for the ad-supported tier.

When the company revealed the details of the plan, streamers were concerned that the service only provided 720p standard definition video quality and that only one screen can use an account at a time. However, that is about to change.

“This month we’ll upgrade the feature set of our ads plan to include 1080p versus 720p video quality and two concurrent streams in all 12 ads markets,” Netflix said in the shareholder letter. “We believe these enhancements will make our offering even more attractive to a broader set of consumers and further strengthen engagement for existing and new subscribers to the ads plan.”

Another reason that Netflix might be making moves to strengthen its ad-supported tier might be in an effort to give customers impacted by the password-sharing rules an attractive subscription option to keep them in the streaming service’s orbit, rather than seeing them walk away entirely. Analysts have recently said that the streaming service could add up to $3.5 billion in the coming years because of these password changes, assuming that a significant number of people who currently use the service, but do not pay for it, decide to sign up for their own accounts when the rules kick in. Because Netflix makes more money on the ad-supported plans than the ad-free premium ones, giving people additional incentives to pick the Basic with Ads plan would apparently help the company’s bottom line.

Whatever the rationale, the fact that after less than six months, Netflix is already seeing fit to increase the benefits of its lowest price tier would seem to be a positive for customers looking to get the most bang for their streaming bucks.

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Netflix

Netflix is a leading subscription-based video streaming service that offers on-demand access to an extensive library of over 3,000 movies, 2,000+ TV shows, and a growing collection of acclaimed Netflix originals. Renowned for producing groundbreaking content, Netflix has become a cultural powerhouse with hit originals like “Stranger Things,” “Wednesday,” “Squid Game,” “The Crown,” “Tiger King,” “Bridgerton,” “The Witcher,” and “Black Mirror.”

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The platform constantly updates its catalog, introducing fresh content alongside timeless classics and international hits. Netflix’s commitment to storytelling has also earned critical acclaim, with award-winning exclusives such as “Roma,” “Marriage Story,” “The Power of the Dog,” “Mank,” and “Ma Rainey’s Black Bottom.” In 2023, their animated film “Guillermo del Toro’s Pinocchio” won an Academy Award for Best Animated Feature, further solidifying Netflix’s reputation for high-quality content.

Recently, Netflix has expanded beyond standard movies and TV titles with the addition of video podcasts, and is also exploring a digital store that would offer third-party streamers within the app.

Netflix offers three plans – stream on 2 devices in HD with the “Standard with Ads” ($8.99) plan, on 2 devices in HD with the “Standard” ($19.99) plan, and 4 devices in up to 4K on the “Premium” ($26.99) plan.

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