After years and years in which it dominated the streaming landscape, Netflix seems to be realizing that it can’t command extraordinarily high prices forever — especially given the fact that there’s so much more at-home streaming competition now. Does that mean the media giant is going to take a backseat to services like Amazon Prime, Hulu, and HBO? Not necessarily. But it does mean that change is going to have to happen if the brand wants to keep dominating the field — and that change is starting with a price announcement. Netflix just announced a new subscription option — and it’s actually affordable. Here’s everything you need to know.
Cheaper — But You’ll Have To Compromise
Proving that few things in life are really free (or super affordable unless there’s a catch), Netflix announced that it is planning to offer a cheaper subscription plan. That caveat? You’ll have to be content with viewing ads while enjoying your favorite TV series or film. Netflix and Microsoft are teaming up to deliver this ad-supported subscription plan, though the details of it haven’t all been revealed and it’s still in its trial “early days.” According to the companies, there is “much to work though” still, though Netflix reportedly told its employees to expect this change to happen by the end of 2022.
Why Now?
There’s one good reason why Netflix is now trying a lower-priced subscription with ads on for size: it has lost a considerable amount of revenue over the past few years.
For the first time in more than 10 years, the streaming company lost subscribers in its first quarter.
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Netflix announced in April that it lost 200,000 subscribers in the first quarter of 2022 and that it is anticipating losing another 2 million of its more than 220 million subscribers in the second quarter. This sent a collective shiver down spines on Wall Street and the company is clearly trying to find way to make up for the losses.
The details shared on a Netflix blog post simply state: “It’s very early days and we have much to work through. But our long term goal is clear. More choice for consumers and a premium, better-than-linear TV brand experience for advertisers. We’re excited to work with Microsoft as we bring this new service to life.”
Still, there’s a lot left to learn about this decision. How much will an ad-based subscription cost? Will it be enough of a significant drop to convince current users and those who left Netflix to forego commercial-free viewing and deal with a few annoying ads in exchange for a lower monthly bill? Time will tell — but it’s clear to see that even the most colossal of streaming giants have to keep pace to compete in a saturated entertainment market.
