{"id":26206,"date":"2022-12-28T01:19:58","date_gmt":"2022-12-28T01:19:58","guid":{"rendered":"https:\/\/mailinvest.blog\/index.php\/2022\/12\/28\/ad-based-netflix-arrives-with-a-thud\/"},"modified":"2022-12-28T01:19:58","modified_gmt":"2022-12-28T01:19:58","slug":"ad-based-netflix-arrives-with-a-thud","status":"publish","type":"post","link":"https:\/\/mailinvest.blog\/index.php\/2022\/12\/28\/ad-based-netflix-arrives-with-a-thud\/","title":{"rendered":"Ad-Based Netflix Arrives With A Thud"},"content":{"rendered":"

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from the this-ain’t-it,-boss<\/i> dept<\/h3>\n

As a publicly traded company, it\u2019s simply not good enough to provide an affordable service that people genuinely like. The pressure to deliver quarter over quarter growth often takes on a tendency toward auto-cannibalism; price hikes, customer support cuts, dumb ideas justified through greed, all designed to goose short-term growth, but often at the cost of brand reputation and long term service quality.<\/p>\n

That\u2019s the metamorphosis currently underway at Netflix. <\/p>\n

After years of explosive growth, the company lost nearly a million subscribers\u00a0between April and July<\/a>. In part due to new competition in streaming, but also because Netflix executives are stuck in this auto-cannibalism loop; sacrificing what\u2019s popular about the service (affordability, no ads, few weird restrictions, decent content) to feed Wall Street\u2019s insatiable maw.<\/p>\n

Instead of focusing on service quality and not being annoying, Netflix executives spent much of the last year insisting that a ham-fisted crackdown on password sharing<\/a> and a new ad-based tier would fix what ails the company. But right out of the gate, Netflix\u2019s new $7 \u201cBasic With Ads\u201d tier was saddled with all manner of annoying restrictions that undermined its entire purpose. <\/p>\n

Ad-based customers can\u2019t stream in standard HD (all streams are restricted to 720p), can\u2019t stream to more than one device simultaneously, can\u2019t download films to watch on a plane, and see a\u00a010% smaller catalog overall<\/a>\u00a0due to licensing constraints. The ad-based tier also wasn\u2019t initially supported on a number of different hardware platforms,\u00a0including Apple TV<\/a>\u00a0or older Chromecast devices.<\/p>\n

Shockingly, this all resulted in the new ad-based tier being the least popular option in its first month of life<\/a>:<\/p>\n

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Subscription data analytics firm Antenna shared their data with Gizmodo where it noted that just 9% of all new Netflix subscribers opted for the Netflix Basic With Ads Tier last month. The $6.99 a month service launched Nov. 3 in the U.S., but Antenna told the Wall Street Journal over half of those ad-based sign ups were people re-upping their subscription after it lapsed or were joining for the first time.<\/em><\/p>\n<\/blockquote>\n

The hope is to get people hooked on a cheaper tier, then upsell them through annoyance to more expensive, less restrictive tiers. That\u2019s basically the upward funnel model the traditional TV sector adopted for decades, working tirelessly to push customers to higher priced tiers or bundles by annoying the hell out of them, since you don\u2019t actually want<\/em> users staying on the cheapest option possible. <\/p>\n

A cheaper ad-based tier doesn\u2019t really fix what ails Netflix because it\u2019s not actually fixing what customers are getting annoyed by. Wall Street doesn\u2019t want to embrace any of the things customers actually want (lower prices, improved service quality, fewer obnoxious restrictions) so you get stuff like this designed to look creative and appealing but isn\u2019t, actually. It\u2019s the inversion of actual innovation. <\/p>\n

Stuck under Wall Street\u2019s thumb, Netflix seems intent on reducing quality while nickel-and-diming existing customers, which won\u2019t work in a hyper-competitive streaming space where consumers actually have the choice of competitors that are still actually focused on quality, affordability, decent support, and customer satisfaction. <\/p>\n

\nFiled Under: ad-free-tier<\/a>, advertising<\/a>, cable tv<\/a>, competition<\/a>, password sharing<\/a>, prices<\/a>, streaming<\/a>, video<\/a>
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Companies: netflix<\/a>\n<\/p>\n<\/div>\n