OTT giant Netflix is seriously brainstorming to provide ad-supported, cheaper plans for its subscribers for the first time since its inception. Not immediately but in the next couple of years. It’s a big shift in the company’s strategy because until now, Netflix has been a fierce advocate of offering an ad-free experience for its viewers.
Regarding the ad-driven business model which is already being followed by some rival OTT platforms, Netflix co-CEO Reed Hastings stated that “Those who have followed Netflix know that I’ve been against the complexity of advertising and a big fan of the simplicity of subscription. But as much as I’m a fan of that, I’m a bigger fan of consumer choice.”
It is to be noted that even after launching an ad-supported version, willing customers can still enjoy an unadulterated, ad-free experience on Netflix by paying relatively more for the ad-free plans.
Currently, Disney+ Hotstar is already providing its users the option to choose between an ad-free and a cheaper ad-supported plan. For instance, in India, the former (Super plan) can be availed for Rs.899/- per year while the latter (Premium plan) will set you back by Rs.1499/- per year.
Last year, in December, Netflix had reduced the rates for its Indian subscribers. The platform is now offering a monthly plan for as low as Rs.149/- per month (mobile plan) and a basic plan for Rs.199/- per month. This was ostensibly done to increase its subscriber base for a price-sensitive market like India.
The news about Netflix’s intention to go for ad-supported plans has come off the heels of the recent revelation about the streaming giant’s subscriber loss of 2 lakh subscribers during this year’s first quarter. Consequently, Netflix’s overall subscriber base has reduced from 221.8 million to 221.6 million users. The company’s shares also fell by a significant 27%.
The aforementioned subscribers’ reduction was purportedly because of the Russia-Ukraine war which led to stalling of Netflix’s OTT services in Russia. Besides, Netflix is also trying to deal with the password sharing issue, that is, its users sharing their passwords outside of their own households. Additionally, Netflix is also facing competition from rival OTT players. All these factors may have led to revenue leakage and subscriber loss for Netflix. And hence, the change in their business strategy.
We’re hiring!
We are hiring two full-time junior to mid-level writers with the option to work remotely. You need to work a 5-hour shift and be available to write. Interested candidates should email their sample articles to [email protected]. Applications without a sample article will not be considered.
