April 19, 2023, 1:44 pm | Read time: 3 minutes
Netflix’s ad-supported subscription still struggles with subscribers. The streaming service now aims to improve this with some significant changes.
Netflix introduced its ad-supported subscription in November 2022. Since then, it hasn’t been particularly well-received by subscribers. The launch flopped, leading some advertisers to demand refunds. Now, Netflix is making adjustments to its latest subscription model to attract more viewers to the cheaper option. However, this also makes another subscription significantly less appealing.
Netflix’s Ad-Supported Subscription with Some Changes
Netflix has presented its numbers for the second quarter of 2023, along with the announcement of some changes. Overall, 2023 is going better for the streaming service than the previous year, which saw declining subscription numbers in the first half of 2022. In response, Netflix announced several measures. On one hand, the service aims to combat widespread “account sharing” with additional fees. On the other hand, the ad-supported subscription was introduced. This new model costs less than other plans. In return, subscribers see ads and not all content from standard subscriptions is included—not even all Netflix Originals.
Additionally, subscribers to the ad-supported plan must deal with lower HD resolution and can only use one stream. However, Netflix plans to change this soon. By the end of this month, the quality will be upgraded to full HD, and the maximum number of streams will be increased to two. With this, Netflix aims to make the ad-supported subscription more attractive—to its users and, consequently, to advertisers.
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Is the Netflix Basic Subscription Without Ads Still Worth It?
Enhancing the ad-supported model also means downgrading the next tier: the basic subscription. Users currently pay 7.99 euros per month for this version. While they have access to content, the stream is also only in HD, and only one person can access the platform. The ad-supported subscription now offers better quality and more features for 4.99 euros—except in terms of content. This might still be the decisive argument for many to choose the basic subscription without ads.
Deadline for Account-Sharing Fee Further Delayed
Additionally, Netflix has announced that the introduction of fees for so-called “account sharing” will be further delayed. This is likely to please many subscribers, as current surveys show that many share their streaming accounts with others. Netflix, on the other hand, hopes the fees will increase revenue. Estimates suggest that it costs the streaming service about 9 billion U.S. dollars annually because so many use Netflix without paying regularly.
In some countries, the additional fees are already in place. For many other countries, including Germany, a start was planned for March 2023. However, this has not yet been implemented. Netflix has now announced that a broader rollout in more countries will occur in the second quarter of 2023. This sounds rather vague and suggests a start towards the end of the quarter in June. For Germany, we can expect similar fees as in Spain for sub-accounts, namely 5.99 euros.
This makes such an additional account more expensive than the 4.99 euro ad-supported subscription. With this measure, Netflix also seems to want to draw more users to the ad-supported subscription.