Netflix Sees Record Sign-Up Rate for Its Ad-Supported Plan as Password Sharing Restrictions Force Changes
It’s been something of a tough go for Netflix’s Standard with Ads plan thus far. Surveys have consistently shown that Disney+ is ahead of Netflix in the number of users signing up for the companies’ respective ad-supported plans, despite the fact that Netflix launched its offering a month earlier than Disney and has millions more customers than its competitor.
However, things may finally be starting to turn around for the world’s largest streamer on that front. New data from Antenna shows that Netflix has continued to see elevated paid subscriber sign-ups since May, when the company officially began enforcing new rules designed to stop users from sharing passwords. Gross additions to Netflix fell 25.7% between June and July, but they were still elevated in July as compared to the 10 months that preceded June.
Best yet for Netflix, is that the company saw a rise in the percentage of customers subscribing to its ad-supported tier. Streaming companies like Netflix generally make more money per customer from plans with ads than they do from ad-free streaming, so Netflix has been using any methods necessary to funnel new customers to Standard with Ads. This is why Netflix eliminated its lowest-priced ad-free plan in late June, in order to push new subscribers to the ad-supported option, or a more expensive premium tier. In July, 23% of Netflix sign-ups went to the ad-supported tier, just the second time in its short history that it has attracted more than 20% of gross Netflix additions in a month.
Rules against password sharing have certainly aided Netflix’s efforts to sign up more customers for its ad-supported plan. The streamer also said goodbye to its least expensive ad-free choice in July, which means the cheapest Netflix plan outside the $6.99 per month Standard with Ads tier is now its $15.49 per month Standard option.
The slow adoption rate of the Standard with Ads plan led Netflix to rework its deal with Microsoft, which is providing the software for its advertising suite. Netflix is also asking for less from advertisers, and doesn’t expect the Standard with Ads plan to be a meaningful contributor to company revenues this year.
Netflix definitely still has work to do with its ad-supported tier. Antenna’s own numbers indicate that so far, only 3.3% of Netflix’s total customer base is subscribed to Standard with Ads. Compare that to Hulu and its 90% ad-supported customer pool, and it’s easy to see why Netflix might think it’s barely scratched the surface in ad-supported streaming.
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.