Netflix price raise3/16/2024 ![]() ![]() On Tuesday, Netflix sounded a positive note on its growing advertising business. In October, Netflix said it raised the price of its premium ad-free plan to $22.99 while its one-stream basic plan rose to $11.99.Įarlier this month, Amy Reinhard, Netflix’s president of advertising, said Netflix’s ad tier hit more than 23 million monthly memberships. The plan is significantly cheaper than Netflix’s ad-free offerings, at $6.99 per month in the US. ![]() In the past year, the company implemented several initiatives aimed at adding subscribers, including a password-sharing crackdown that pushed password “borrowers” into creating their own subscriptions and introducing an advertising-supported subscription tier for $6.99. Password sharing and Netflix’s foray into ads Overall, Netflix now has a record number of subscribers at 260.3 million.Īnd investors seem to be cheering: Netflix’s stock jumped more than 7% in after-hours trading Tuesday. While Netflix added 1.2 million paid subscribers in the fourth quarter in the US, much of the strongest subscriber growth came internationally from Europe and Asia. The company added more than 13 million subscribers for the quarter, compared to Wall Street’s expectation of 8.7 million. That means, when it comes to the streaming market, they have more power than ever.įorrester clients: Let’s chat more about this via a Forrester guidance session.Netflix announced a major boost in sign-ups in the fourth quarter on Tuesday. Why? Consumers today have lots of choices to satiate their content cravings. As content quality suffers, so will the companies behind it. Content is the product of streaming services. Streamers are already pulling back on content to save money, and the Hollywood strikes have only exacerbated the issue. Not only are consumers getting no additional value with recent and planned price hikes, they’re, arguably, getting less value. Yes, raising prices will boost revenue for streaming services in the short term, but overusing this marketing lever isn’t sustainable, as consumers expect value: great content at a fair price. The Streaming Service That Solves The Value Equation Wins The War One in four ad-free streaming users are inclined to NOT pay the extra cost (should their streaming service raise prices again) to maintain an ad-free experience, while a third are undecided.About a third of ad-free streaming users are considering downgrading to an ad-supported subscription tier in order to save money.The majority (roughly 60%) of ad-free streaming users already feel like they’re paying too much money for an ad-free experience on their streaming service(s).Over 80% of ad-supported streaming users who we polled would prefer an ad-free experience but don’t want to pay the extra money for it.We segmented the 262 respondents who use Netflix, Disney+, or Max. Over the last five days, Forrester polled US online adults in its ConsumerVoices Market Research Online Community about their attitudes and behaviors regarding ad-free vs. ![]() And among those who canceled a streaming service in the past year, the most frequently selected reason was that “it was too expensive.” Yes, Streaming Users Will Tolerate Ads To Avoid Paying Too Much Price Is A Core Driver Of Streaming Cancellationsįorrester’s (just published) data overview report on streaming-service user behavior underscores the role of price in the overall “value equation” that drives streaming service loyalty or churn: The most commonly reported consideration for US streaming users to keep or cancel a service is price, according to Forrester’s 2023 data. The planned price hikes from both Netflix and Amazon follow last week’s Disney+ premium price increase - its second one this year. That’s why Prime Video will soon launch a default ad-supported tier and, for the first time, will upcharge Amazon Prime subscribers to retain their ad-free Prime Video experience. Not only does this yield better margins, but it amasses larger addressable audiences to attract coveted advertisers. The streaming giants are eager to drive more ad-tier subscriptions. Streaming Services Are Price-Pinching Users Into Their Ad Tiers As a result, Netflix will likely detail plans to hike its premium prices (again) as a means to bolster level-priced ad-tier subscriptions. Last quarter, the company said that revenue from advertising is “not yet material enough” but that it’s confident it will turn into a multibillion-dollar revenue stream. In spite of this, all eyes (and ears) will be on the state of Netflix’s ad business. Expect the company to have made more headway with its password-sharing crackdown. Netflix will report its Q3 2023 earnings on Wednesday.
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