Netflix backtracks on ad-supported tiers, says it is now "open" to cheaper subscriptions

midian182

Posts: 7,919   +82
Staff member
What just happened? A month after the company confirmed it had no plans to do so, Netflix has said it is looking at offering lower-priced, ad-supported tiers on its service. The news comes in the wake of Netflix's Q1 financial report that revealed the streamer has lost subscribers for the first time in a decade.

During an earnings call yesterday, Netflix co-founder and co-CEO Reed Hastings said it is "quite open to offering even lower prices with advertising, as a consumer choice."

Back in March, following Disney Plus' announcement that it would be introducing an ad-supported tier later this year, Netflix CFO Spencer Neumann said it wasn't something in the company's plans and that it didn't "make sense" for Netflix to go down the same path many others are taking. Neumann did add, however, "never say never."

The timing of the news comes as Netflix reported it is 200,000 subscribers down since the beginning of the year, something it blames on increased competition, its withdrawal from the Russian market, and its favorite target: password sharing. The second pandemic-era price hike Netflix introduced in January was also an issue, blamed partly on the 600,000 subscribers it lost in the US and Canada.

Hastings admitted to being against the complexities of advertising, preferring the traditional subscription models instead. "But as much as I am a fan of that, I am a bigger fan of consumer choice, and allowing consumers who would like to have a lower price and are advertising-tolerant to get what they want makes a lot of sense," he added.

It will be at least a year before we see ad-supported tiers on Netflix, if not longer. And that assumes it does push ahead with the plans. But given that Paramount+, Peacock, Hulu, and soon Disney+ offer the same options, it seems Netflix is preparing to join the rest of its rivals, though it might be feeling forced into the decision.

Permalink to story.

 

Irata

Posts: 2,126   +3,665
How about giving fans (=paying customers) what they want rather than trying to appeal to appeal to a vocal part of Twitter. Cowboy Bebop and He Man come to mind….

Am (still) subscribed to Netflix but feel increasingly less inclined to turn it on.
 

NeoMorpheus

Posts: 1,147   +2,313
Am (still) subscribed to Netflix but feel increasingly less inclined to turn it on.
I just cancelled, after being a subscriber for over 10 years.

They simply priced themselves out of the market.

I mean, just look at the Disney+, Hulu and ESPN (which I dont care for) combo, all that is still cheaper than the Netflix plan that I need (I need the $20 plan, because is the only one that has 4K and I am very susceptible to blurriness due to lower res).

So unless they lower the price or everyone else makes 20 bucks a month the norm, I will stay away from them.
 

McMurdeR

Posts: 519   +655
I just cancelled, after being a subscriber for over 10 years.

They simply priced themselves out of the market.

I totally agree. Agressively pushing up prices is the wrong response to increased competition!

The overall quality of their home grown content needs to be better. They seem to be paying far too much for mediocre content. Perhaps they'd be better served by managing costs?

All in all I think they're still the best service, but the gap is closing, and they're no longer offering great value... will be keeping a close eye on it.
 

Neatfeatguy

Posts: 843   +1,453
I'm on the DVD plan...cheap

I miss the combo stream + DVD plan from Netflix. You now have to pay for one or the other or both.

As for Netflix, I think the standard plan (1080p streaming) is $15.49 a month.
12 months = $185.88
6 months = $92.94

I've been subbed to Netflix since 2010, I think that's what my account says.

It would be nice to have a company reward long term customers with discounted rates, to help encourage them to stick with them.
Maybe ever full 12 months you've been a subscriber, you earn 5% off for the first 5 full years.
After 1 year you pay $14.72 a month
After 2 years you pay $13.98 a month
After 3 years you pay $13.28 a month
After 4 years you pay $12.62 a month
After 5 years you pay $11.99 a month.

Then, as long as you keep your subscription going you keep that nearly 30% savings as long as you're subscription stays active. If you cancel your subscription you lose your savings and if you want to resub you start back at the normal price of $15.49.

I'm on the fence for dropping Netflix. The wife doesn't use it much. The 14 year old daughter, she doesn't use it at all. The 9 year old son he still uses it a lot. Myself, I can go months without watching it. I use it more than the wife, but not by much. If the price was less I probably wouldn't care if I left it on a automatic renewal, but with the constant increase in prices it's becoming less and less desirable to keep as one of the streaming options for us.

We have access to many other streaming options that are priced much less. Saving about $16 a month isn't a ton of money, but that's around $190 a year I wouldn't be pissing away. That's almost the cost of a trip to the grocery store for us.
 

waclark

Posts: 352   +240
I miss the combo stream + DVD plan from Netflix. You now have to pay for one or the other or both.

As for Netflix, I think the standard plan (1080p streaming) is $15.49 a month.
12 months = $185.88
6 months = $92.94

I've been subbed to Netflix since 2010, I think that's what my account says.

It would be nice to have a company reward long term customers with discounted rates, to help encourage them to stick with them.
Maybe ever full 12 months you've been a subscriber, you earn 5% off for the first 5 full years.
After 1 year you pay $14.72 a month
After 2 years you pay $13.98 a month
After 3 years you pay $13.28 a month
After 4 years you pay $12.62 a month
After 5 years you pay $11.99 a month.

Then, as long as you keep your subscription going you keep that nearly 30% savings as long as you're subscription stays active. If you cancel your subscription you lose your savings and if you want to resub you start back at the normal price of $15.49.

I'm on the fence for dropping Netflix. The wife doesn't use it much. The 14 year old daughter, she doesn't use it at all. The 9 year old son he still uses it a lot. Myself, I can go months without watching it. I use it more than the wife, but not by much. If the price was less I probably wouldn't care if I left it on a automatic renewal, but with the constant increase in prices it's becoming less and less desirable to keep as one of the streaming options for us.

We have access to many other streaming options that are priced much less. Saving about $16 a month isn't a ton of money, but that's around $190 a year I wouldn't be pissing away. That's almost the cost of a trip to the grocery store for us.


The problem with reducing prices for long time subscribers is that Netflix's cost aren't going down over time. In all likelihood they are going up. If you want the latest and greatest content, then you have to pay for it. The question is whether Netflix delivers the content you like to watch. At $16/mo you really only need to watch a couple movies or shows for it to be financially attractive, which assumes you like to watch movies and would go to a theater if you didn't have Netflix.

I think a lot of us are now managing subscription services on a monthly basis in order to keep our cost down. If you're not watching NF, then turn it off for a couple months and save.
 

RudyBob

Posts: 570   +532
15.49 a month is a bargain in my book. I don't want to go to the movies and pay that much for stale juju bees. I don't stream cause they don't run cable into rural America.
 

Uncle Al

Posts: 8,783   +7,709
The simple problem is they no longer offer anything unique as compared to all the other companies that are streaming and since they announced they are clamping down on those that share passwords they are cutting their own throat .... as recent announcement they lost over 200,000 subscribers in the past quarter ...... the writing is on the wall .... we'll have to wait and see if any of them know how to read!
 

Soaptrail

Posts: 40   +47
I miss the combo stream + DVD plan from Netflix. You now have to pay for one or the other or both.

As for Netflix, I think the standard plan (1080p streaming) is $15.49 a month.
12 months = $185.88
6 months = $92.94

I've been subbed to Netflix since 2010, I think that's what my account says.

It would be nice to have a company reward long term customers with discounted rates, to help encourage them to stick with them.
Maybe ever full 12 months you've been a subscriber, you earn 5% off for the first 5 full years.
After 1 year you pay $14.72 a month
After 2 years you pay $13.98 a month
After 3 years you pay $13.28 a month
After 4 years you pay $12.62 a month
After 5 years you pay $11.99 a month.

Then, as long as you keep your subscription going you keep that nearly 30% savings as long as you're subscription stays active. If you cancel your subscription you lose your savings and if you want to resub you start back at the normal price of $15.49.

I'm on the fence for dropping Netflix. The wife doesn't use it much. The 14 year old daughter, she doesn't use it at all. The 9 year old son he still uses it a lot. Myself, I can go months without watching it. I use it more than the wife, but not by much. If the price was less I probably wouldn't care if I left it on a automatic renewal, but with the constant increase in prices it's becoming less and less desirable to keep as one of the streaming options for us.

We have access to many other streaming options that are priced much less. Saving about $16 a month isn't a ton of money, but that's around $190 a year I wouldn't be pissing away. That's almost the cost of a trip to the grocery store for us.

Why on earth are you on the fence? Cancel it already. What is the problem. When you want to watch it again buy it again for a month.

I will continue to share my netflix password since $20 is too much when I am paying $1 for Hulu and $4 for Disney+. I have no qualms about cancelling services despite what my daughters want. They can go a couple months without a service and then watch whatever it is they want in month. no reason to give these companies your money every month if you are not getting your money's worth out of it.
 

Neatfeatguy

Posts: 843   +1,453
Why on earth are you on the fence? Cancel it already. What is the problem. When you want to watch it again buy it again for a month.

Because the 9 year old in the family watches it on an almost daily basis. If he wasn't using it, I wouldn't keep it.