Tag: netflix

Netflix published a new shareholder letter that covers the second quarter of the year. Revenue continues to grow and Netflix is optimistic that the trend continues.

The letter covers monetization on the platform, which may also be of interest to Netflix subscribers.

In short:

• Netflix plans to double ad-revenue in 2025.
• Netflix plans to refine its plans and pricing “to improve monetization”.

It does not take a genius to understand how this is going to affect subscribers. Expect another round of price increases, at least in select markets, and more ads on the platform.

While the doubling of ad-revenue will also come from the creation of the company’s ad platform and its development, it is quite probable that Netflix may increase the time ads play per hour for users who are subscribed to the ad-powered plan on the site.

It is interesting to note that Netflix has not seen any negative effects regarding its recent price hikes, introduction of advertisement, increase of ad views, and changes made to the service. Growth continues and most customers seem to stick with Netflix, regardless of what the service does.

Netflix is not the only streaming service that is betting big on ads to fuel growth. Amazon revealed recently that it plans to double ad minutes on Prime Video.

My strategy regarding streaming services remains unchanged. Subscribe selectively for a short period, e.g., a month, or grab a very cheap promotional offer, watch the few shows or movies that are worth watching, and then cancel. For the past decade or so, I have found fewer and fewer reasons for subscribing to Netflix and other streaming services. Main reason? I do not find the shows and movies that they put out appealing or interesting.

What about you? Do you have a subscription to a streaming service? If so, what do you like to watch?

The next frontier for AI is advertisement. While some companies are already experimenting with AI-powered advertising formats, more and more will hop on the bandwagon to increase revenue and ideally make ads more lucrative for companies and better for users as well.

Netflix announced a push into AI-drive advertising, which it calls creative formats, just this week. The main idea is to improve advertising results with the help of generative artificial intelligence. The new ad-powered plans have pushed Netflix subscribers and revenue to new heights and there is seemingly no end to the growth just yet.

For users, the new formats could lead to more ads that try new tricks to get them to click and make a purchase.

Creative Ad-formats incoming

The first creative formats that come out of Netflix’s new modular framework for ads are interactive midrolls and pause ad formats. These introduce custom advertising creatives with “added overlays, call to action, second screen buttons, and more” to serve “the right ad to the right member at the right time”.

Netflix revealed that these new formats will become available in all countries in which the ad-supported Netflix plan is supported. The company plans to finish the rollout by 2026.

Does that mean that Netflix subscribers, who are subscribed to an ad-powered plan, will see more advertisement in the future? It sounds like it. Pause ads, for instance, are a new ad format that pushes advertisement to the screen when the viewer hits the pause button on the remote. That is one ad that has not been displayed before.

The new creative mid-roll ads, which Netflix says are interactive, are also new. It is possible that these are deducted from the hourly playtime of advertisement on Netflix, but Netflix has not commented on any of that at this stage.

Closing Words

AI-powered advertisement could introduce another issue to Netfix subscribers, besides increasing ads on the platform. AI may optimize ads and placements of ads to increase user engagement. In other words, it could lead to an increased spending by users by exploiting emotions or using other psychological tricks.

If you want my advice, it is better to sign-up for a single month or two of ad-free viewing on Netflix per year than to subscribe to the streaming service for an entire year. You could subscribe to other streaming services for a month or two as well each year. You will save quite a bit of money doing so, and the only downside is that you may not be able to view a particular show or movie when it comes out.

Now You: are you subscribed to ad-powered plans at Netflix or other streaming services? What is your take on these plans in general? Feel free to leave a comment down below.

Years ago, I predicted that streaming companies would raise subscription prices regularly, maybe even yearly. Today, news broke that Netflix is raising the price of subscriptions again.

The details:

• The new prices affect viewers from the United States, Canada, Portugal, and Argentina.
• In the US, the price of a subscription rises between $1 and $2.50, depending on the plan.
• The changes take effect on the next billing cycle.

Here is the new price structure in the United States:

• Standard with Ads is now $7.99 (up $1)
• Standard is now $17.99 (up $2.50)
• Premium is now $24.99 (up $2)
• Adding an extra member is now $8.99 (up $1)

This is the first price increase since October 2023, when Netflix increase the price of Premium from $19.99 to $22.99 in the United States. It also increased the price of its Basic plan back then, but this plan is no longer available.

There you have it. Disney increased pricing last August already in the United States.

My 2023 article on the matter still stands. I predicted regular price jumps, and more and more ads on the platforms. Ads would bring in revenue, but also make the pricier plans more attractive. It is a page directly out of Google’s playbook on YouTube. Make ads insufferable and you will increase subscriptions to more expensive plans that promise fewer or no ads.

I will continue what I have been doing for years: subscribe to a streaming service for just a month, if they have something that I’m interested in. Do that once a year, and you save a lot of money. Yes, you won’t be the first to watch a new show, but that is not really important to me.

Now it is your turn. Are you subscribed to streaming services? If so, to which and how much do you pay currently for the subscription?

Netflix’s reported strong earnings, revenue, and an increase in subscribers for the third-quarter of this fiscal year.

One of the most important takeaways is that people seem to love the ad-powered Netflix plan. Netflix says that more than 50 percent of all subscribers in the third-quarter selected the Standard with ads plan. Compared to last quarter, membership of the ad-powered plan rose by 35% alone.

The development is not really that surprising, here is why: Standard with ads is available for less than half the price of the Standard plan. In the US, it is available for $6.99 instead of $15.49.

It is all about the price of membership. Standard with ads and Standard offer nearly identical features. The only difference that matters is that some movies and TV shows are not available in the ad-driven plan.

Everything else, including downloads on two supported devices and 1080p streams are identical. So, a nearly identical feature set for users.

Ad-powered plan subscribers pay less to Netflix each month, but they have to sit through advertisement whenever they tune in. This means, effectively, that they pay with their time, as it takes longer to watch a movie or show, as the playtime of ads needs to be added to the total time.

The next couple of quarters

Here are my top predictions:

• Netflix will continue to see growth, especially when it comes to the ad-powered plan, in the next quarters.
• Growth will slow down eventually. Netflix may then increase the price of the ad-powered plan for the first time to make up for this or increase the number of ads.

Closing Words

I do not have much use for streaming services nowadays. Most shows and movies that they produce are bland, in my opinion. There is the occasional exception, but this almost feels like winning the lottery nowadays.

This is not a Netflix-specific problem. When I look at Disney+ or Amazon Prime Video, I come to the same conclusion.

I’ll stick to my subscribe for a month every now and then strategy, but it has changed from switching every second or so month to maybe subscribing once or twice a year only for a month.

What about you? Are you subscribed to any streaming platform? If so, is it an ad-powered plan or an ad-free plan? Feel free to leave a comment down below.

Netflix customers who still have a Basic subscription will soon receive word from the company about it. Basic is going away. Netflix began by pulling the plan from its website and apps.

New users could not sign-up anymore for the plan, but the company did not touch existing subscriptions.

Now, it is targeting these subscribers.

The message is clear: Basic is going away, and you have to subscribe to another plan if you want to continue watching content on Netflix.

Basic subscribers have three options basically:

• Subscribe to the Standard plan. It is more expensive, at $15.49 compared to $9.99 in the United States, but it offers additional features as well. This includes watching Netflix on up to 2 supported devices at a time, Full HD resolution support, and an option to add one extra member.
• Subscribe to Standard with ads. Much cheaper, at $6.99 in the United States. Downside is that it includes ads that you need to endure.
• Do nothing and stop using Netflix.

Netflix’s shows cancellation message to Basic subscribers

The first batch of Basic plan subscribers appear to have received notifications by Netflix about the upcoming end of their plan.

The message is displayed in fullscreen on the device. It says:

Your last day to watch Netflix is “DATE”.

Choose a new plan to keep watching.

Your Basic plan has been discontinued, but you can easily switch to a new one. Plans start at “MONEY” with upgraded features.

Reports claim that Netflix won’t open anymore unless users select a new plan, even if the planned cancellation date is in the future.

Why is Netflix discontinuing the Basic plan? The most likely answer is money. Users who switch to Standard pay more directly. Netflix revealed some time ago that Standard with ads is generating more money than the Basic plan.

Also, development and engineering has one less plan to worry about, which may streamline things further.

While Netflix may loose subscribers, it seems likely that a good percentage will switch to a different plan. Netflix will monitor the response in the countries that it launched the change in.

My advise continues to be the same: do some subscription hopping. Subscribe for one service for one or two months, then cancel and subscribe to another. This way, you do not really miss out on anything without breaking the bank. I expect the next round of price raises is not far away.

What about you? Do you have a Netflix or other streaming service subscription?

Streaming, which once set out to replace classic TV, is slowly but steadily turning into the very thing it set out to replace.

Those who still do not believe it may have a change of heart when they hear this: Netflix is apparently considering launching a free plan in some countries.

The plan will be ad-powered, which means that users will see advertisement whenever they tune in.

Depending on the country, this plan is going to make the ad-powered plan even cheaper. It is unclear at this point whether it will replace the Standard with Ads plan that Netflix currently offers, or if subscribers will have to sit through more ads to make up for the difference, or get another disadvantage.

Netflix’s motivation behind this is to get more customers in countries with potential for that. This is also the reason why it won’t offer the free plan in the United States.

The company hopes that this new plan will fuel further growth, which will make shareholders happy. It also needs to push ads to reach critical mass.

Considering that Netflix is a first-mover, it is possible that the likes of Disney, Warner, or Paramount will also switch to offering a free ad-driven plan. They followed Netflix’s introduction of an ad-drive plan and its fight against password sharing already.

Classic TV is abysmal because of ads

I have to admit that I do not watch a lot of TV or streams. While I tune in to watch movies or shows, this usually happens using streaming services.

I suffer through the rare occasions when I watch classic TV. Maybe it is a game that is only shown there, or something else that is exclusive. The sheer number of ads makes my stomach turn.

Ads at streaming services, including YouTube, may add another dimension to the experience. Most add tracking, which means that you not only lose minutes of your life each hour media is consumed, you are also tracked while suffering.

There is a reason why I prefer buying movies or TV shows on disc when I like them. These do not have ads and I can watch them whenever I want, even when I sit in a cabin in a remote part of Canada.

Closing Words

It is almost certain that an upcoming free Netflix plan will attract lots of users. The exact nature of it is unknown at this point, and it remains to be seen how Netflix plans to release it in the markets it is aiming for.

It could be an interesting option for users who are interested in just a few shows. They could join up and watch these without paying anything. Well, other than with their data and time, that is.

What about you? Would you sign-up for a free Netflix plan, if it would become available in your country?

Netflix users may subscribe to the service for $6.99 per month, but the caveat is that the plan includes ads. The company published One Year Into Netflix Ads this week on the official blog to look back and into the future of ads on the platform.

According to the post, Netflix’s Standard with Ads plan has reached 15 million global monthly active users already. This may not look like much, when compared to the 247 million total subscribers, but the number is growing significantly.

Netflix has a partnership with Microsoft Advertising to deliver adverts to viewers. The company announced a number of new features and changes for advertisers and also for users subscribed to the ad-powered plan.

Binge Ad format and sponsorships

Netflix plans to introduce the binge ad format in the first quarter of 2024. Netflix customers who watch four episodes of a show in a row will get the fourth episode ad-free.

It is unclear if this new format will impact the overall time that advertisement plays per hour on Netflix.

Sponsorships are already available in the United States. Netflix plans to expand these globally in 2024.

Three types of sponsorships are available: title, moment and live sponsorships. Here is what they represent:

• Title sponsorships are tied to specific titles.
• Moment sponsorships allow advertisers to tap into local holidays.
• Live sponsorships are available for live events, such as Netflix’s live sports event, the Netflix Cup.

Other advertising changes

Netflix announced a number of additional changes. New playtimes are available for ads. The service started with 15 and 30 second ads initially. Advertisers may now book 10, 20 and 60 seconds ads globally as well.

Also new are new advertising categories, including dating, pharma and enhanced financial services.

Another change affects the features of the Standard with Ads plan. Netflix notes that it includes 1080p quality now, lets users watch two concurrent streams and that downloads will also become available.

Netflix writes:

All members of the ad-supported plan will be able to download their favorite series and movies, making Netflix the only ad-supported streamer to offer downloads.

Netflix does not explain how this is going to work. It is likely that ads are downloaded along with series and movies. Downloads are a welcome feature, as it gives subscribers the option to watch content while offline, e.g., while travelling.

All paid Netflix plans support downloads once the change lands.

Closing Words

The advertising gamble along with the crackdown on password sharing seems to pay off for Netflix. These helped the company certainly increase its subscriber count.

Whether it is a good strategy in the long run remains to be seen. Netflix announced price increases in several regions recently, but only for ad-free plans.

Clearly, most of the changes benefit Netflix and advertisers only. The new binge watching format sounds like a nice improvement. The majority of changes focus on expanding ads on Netflix.