Only 9% of Netflix subscriptions match the ad plan and that could be a problem

After years of wanting to distinguish itself from conventional television, streaming has fallen into advertising, and major video-on-demand platforms have started rolling out subscriptions with ads at lower price points. In Spain, for example, from November, Netflix has a rate of €5.49, which also allows only a low resolution of reproduction, does not allow the download of contents and moreover considerably limits the catalogue. Disney+ and HBO Max have this rate in the US only. There, Netflix has a package like ours for $6.99 and according to a study it’s the least popular of all it offers.

According to data compiled by Variety, in November, only 9% of Netflix subscriptions belonged to the ad-supported plan and only 0.1% of users who had already paid for the platform at full price switched to the cheaper rate. By comparison, in June 2021, when HBO Max launched its ad-supported offering, 15% of accounts opted for that option and it was 0.2% of current subscriptions that moved. Currently, 21% of HBO Max accounts are on the ad-supported plan and that is Warner Media’s streaming service makes at least its entire catalog available to everyone and has no limitations other than interrupted watching of your favorite series so that you sell a colony.

Although Netflix did not provide its own statistics, it said that the data published by Antenna is not accurate and will report the results of the fourth quarter of 2022 on January 19, but the launch of this tariff should not mean a material contribution to earnings for this period . The problem with so few people choosing to watch the ads is that the company wouldn’t reach the level of audience it would have engaged with advertisers. and was also supposed to repay some payments. In any case, Variety assures that Wall Street are not worried and are counting on the affirmation of this option in the long term, which will be fundamental for the growth of Netflix.

And another way to earn money

Another problem that the company with the red N has in its income is shared accounts. The platform spent months testing how to check that there is only one password per family and that we don’t pass the password to our mother or pay the subscription in half with our friends. Netflix has already announced that it intends to charge shared accounts from 2023, which would affect more than 100 million homes worldwide. According to experts consulted by the Wall Street Journal, one possible solution involves monitoring IP addresses, login location and account activity. According to one study, password sharing causes Netflix to lose more than $135 million a month, or about $1.62 billion a year. There is no official data yet on how it will be monetized and if there will be reduced options even for, for example, relatives who do not live in the same house.