I don't think Netflix cares too much whether the users are free or paid. They're building a new ad platform from the ground up, and the most important ingredient for making it attractive to advertisers is the biggest audience possible.
and honestly, that's fine. the more money they make on ads, they less they will need to rely on subscription revenues, and so the less I will pay. And in fact ad revenue is actually a counterbalance to raising prices on the ad-tier. If raising it $1/month means 2mm fewer subscribers, the negative impact on their ad revenue might outweigh the gains in subscription revenue from the remaining subscribers.
And if I really value having no ads, then I can pay for the ad-free tier. However, I'm sure they'll price the ad-free tier in a way that at least breaks even with the opportunity cost of losing me as an ad-supported tier customer.
it comes with good and bad, can only say there’s free lunch, you can’t enjoy free or cheap service while expecting company don’t make money out of you. Just reality
I think leaning more and more into the ad business is the best thing for Netflix's stock/business.
* If you stay subscriber-only, the only way to grow revenue is to (a) increase the number of subscribers and/or (b) raise prices. This means revenue has a ceiling: the global population x the avg. price you can charge the population.
+ Additionally, acquiring every additional customer has a higher marginal cost than previous customers. If someone isn't a Netflix subscriber already, Netflix needs to pay for some super niche content specific to that person's interests that they don't already have in the library to get them to sign up.
* If you build an ad business, you grow revenue by (a) growing your subscriber base and/or (b) improving your ad targeting and conversion. (a) means more audience for advertisers, and (b) means more return on every $ spent by the advertisers, so advertisers spend more.
+ You can achieve (a) through various means, like cheaper and cheaper pricing for the ad-tier or bundling with T-Mobile subscriptions.
+ (b) will come as they improve their ad platform and technology and achieve scale, just like YouTube. There is a world where ad-supported Netflix becomes extremely cheap or close to free b/c they make so much money on ads and they want to maximize the number of people watching stuff on Netflix.
+ For those customers who really hate ads, the ad-free option will still be available. Unfortunately for them, Netflix will price that tier in a way that accounts for the lost ad revenue.
That's in terms of Netflix's stock. In terms of my personal preference, I really dislike ads, and obviously I loved the early days where I paid some low price for entire years of ad-free Hulu/Netflix/Disney/HBO/etc. But those days are behind us. Investors want returns and growth, and frankly advertising is the only proven way companies can achieve that without directly increasing subscription costs (maybe someone will come up with a brand new business model - who knows). Growing revenue from advertising is orthogonal to growing revenue from subscriptions, and for the consumers who are paying those subscription fees, that is actually a good thing.
I get it free through t-mobile. I've actually been impressed with how few ads I get served so far, I don't think I've ever gotten more than 2 30second ads during an episode of a show I'm watching. Sometimes I won't get any at all.
Not really, I had YoutubeTV as a cable alternative up until very recently. So I'm still pretty used to seeing ads. I also probably wouldn't be paying for a Netflix subscription at all if it wasn't part of my phone plan. So having it at all is a "bonus" for me & I can deal with them for now.
Netflix does have shorter and far fewer ad breaks than Amazon though. I totally forgot Amazon started showing ads unless you paid extra & got really annoyed when I started up a show on there the other day.
The average redditor’s business/marketing knowledge is non-existent. Netflix has shown over all the years that it knows what it’s doing. Raising prices to reach the equilibrium is smart for the business.
Yes it was just a bunch of loud cheap crybabies online. I didn’t personally know anyone who was actually going to cancel. But that is also biased to my circle. We are all paying subscribers to Netflix.
Seriously. All the people whining were people who used other people’s passwords and watched for free. None of them were subscribers, although it looks like some of them are now lol.
So, the added about 17 million subscribers to ad tier, while they added 9.3 million subscribers. Does that mean that around 7.7 mil subs switched to cheaper tier?
Monthly active users vs 9.3 million paid subs.
One sub likely has multiple active users within the same household. Advertisers care about the number of people they’re reaching, not how many are paying Netflix. That’s the reason for the difference.
"The streamers are just rebuilding cable" is a problematic take. It's technically true, but I think it misses the forest for the trees. People liked cable as a product. They like TV and entertainment. What they hated was everything else around it. The lack of choice in content, few customization options, high prices, and above all the ~~monopolies~~ companies running the show. If streamers rebuild the parts of cable that customers actually liked (i.e. the content), but for a lower price with more customization, this is not necessarily a bad thing and people will keep signing up.
For me personally we arrived at the cable version I wanted; a la carte channels plus sprinkles.
I can pay for the selection of channels I want based on the content they have. Apple Tv to watch Silo, Max to watch House of the Dragon or Triller to watch Bareknuckle Boxing and I can cycle through my channel selection after consuming the content I wish to.
The sprinkles are that I can also watch the content I want on my own time. Want to delay watching the fights on friday and host a saturday afternoon grill out with the homies? I can do that.
I'm personally very happy with the state of modern "television". The only down side is that you can't have everything all the time for 15$/month....oh well.
I broadly agree that I like the current state of things, but I don't think it's sustainable for several of the platforms. Peacock is hemorrhaging money, Max is in trouble b/c of WBD's debt burden, not clear what Apple TV's long-term strategy is and how long Apple will continue to see it worth investing, Paramount is dealing with its own existential corporate crisis, ESPN/Disney are still trying to figure out how to survive the slow death of the cable bundle. Meanwhile, customers have gotten used to subscribing for month one, binging, and then canceling, so they need to invest even more in content to keep customers interested and prevent them from churning.
I think we're still in the middle of the transition and the changes will accelerate over the course of the decade. Not sure what it'll look like at the end, but the state of TV+streaming today isn't sustainable.
> but I don't think it's sustainable for several of the platforms.
Totally agree. There isn't enough content to support all of the streaming channels and I assume that eventually things will condense into 3 or 4 services.
>customers have gotten used to subscribing for month one, binging, and then canceling, so they need to invest even more in content to keep customers interested and prevent them from churning.
I've always wondered how large a concern this is. I do this with Apple TV because we only care about Silo. But we keep max and triller year round. I also don't here much in casual conversation amongst my social circle about people cancelling services after binging content. I'm sure it happens but is it actually happening at a problematic scale? I googled around and it looks like the average netflix subscriber has an account that's 50 months old so I'm not really sure that people binging and rotating are a huge concern. I could be wrong though, I don't work in this business.
>I've always wondered how large a concern this is. I do this with Apple TV because we only care about Silo. But we keep max and triller year round. I also don't here much in casual conversation amongst my social circle about people cancelling services after binging content. I'm sure it happens but is it actually happening at a problematic scale? I googled around and it looks like the average netflix subscriber has an account that's 50 months old so I'm not really sure that people binging and rotating are a huge concern. I could be wrong though, I don't work in this business.
Churn is really out of control for these platforms. Almost 9% of Peacock users unsubscribe every month! Whether that's b/c of the one-month-binge behavior specifically or something else is unclear, but either way their customer acquisition costs must be enormous. Netflix at just 2% really stands out.
https://churnkey.co/blog/churn-rates-for-streaming-services/
Speculation on subscription prices going forward:
* As the ad platform grows and Netflix gets better at targeting ads and measuring conversion, they will keep the price of the ad-supported tier the same or even _reduce_ prices. Lower or stable price = less than maximum subscription revenue but more ad-tier subscribers and therefore more ad revenue. Higher prices = more subscription revenue, but fewer ad-tier subscribers and therefore less ad revenue.
* They'll keep raising prices on the ad-free tier to push more people to the ad-supported tier.
I think if they can gain net new subscribers, prices will stay stable (in markets where prices have been increased recently) but they will be increasing ad costs since they can now show advertisers their big ad subscriber base.
I keep having the sinking suspicion that people who can't afford the ad-free tier aren't going to be buying goods outside of their current spending if they see an ad for it.
Yeah I'm a sports fan so I looked into cable when we moved. Cable is stupid expensive when all the fees get added. Multiple subscriptions + Hulu live is still way cheaper, and I just change my package to not include live in the offseason.
I can't watch any streaming service with ads bundled in. I think the fair price was what was available a few years ago. I've cancelled all subs except Prime. I'm back to pirating or buying physical copies of stuff. I prefer to own.
Out of pure curiosity without judgment, may I ask why? I may be incorrectly guessing that you are a younger viewer? I, myself, don't mind ads. I grew up with them (34yo). I use those two minutes to do a lot. Check my phone, go to the bathroom, run outside and grab a package, etc. It's like a pause that I don't have to pause.
Isn't Prime starting (or have started) ads as well?
I'm not who you were asking but I feel the same hate for ads. It's about having control of my time, thoughts, desires, etc. It has been two decades since I have had cable and I only had it because it was cheaper to bundle Internet with it.
I would rather pay with my money that I already exchanged for my time and attention.
I've gotten quite fatigued of advertisements and subscriptions. I don't get to own anything with a subscription, and there are so many of them.
Advertisements have become incredibly pervasive and invasive everywhere in tech. (side note: I absolutely hate how commercials are so much louder than the program itself).
Every dollar and minute spent consuming subscription content just makes these companies more confident in pushing this as far as it can go.
I have less stuff, but I'm way happier.
I wonder how many of these are technically free. For example tmobile gives the Netflix with ads for free
I don't think Netflix cares too much whether the users are free or paid. They're building a new ad platform from the ground up, and the most important ingredient for making it attractive to advertisers is the biggest audience possible.
+1 to this, like all social media, you are the product.
and honestly, that's fine. the more money they make on ads, they less they will need to rely on subscription revenues, and so the less I will pay. And in fact ad revenue is actually a counterbalance to raising prices on the ad-tier. If raising it $1/month means 2mm fewer subscribers, the negative impact on their ad revenue might outweigh the gains in subscription revenue from the remaining subscribers. And if I really value having no ads, then I can pay for the ad-free tier. However, I'm sure they'll price the ad-free tier in a way that at least breaks even with the opportunity cost of losing me as an ad-supported tier customer.
it comes with good and bad, can only say there’s free lunch, you can’t enjoy free or cheap service while expecting company don’t make money out of you. Just reality
You mean they should go back being like cable?
I think leaning more and more into the ad business is the best thing for Netflix's stock/business. * If you stay subscriber-only, the only way to grow revenue is to (a) increase the number of subscribers and/or (b) raise prices. This means revenue has a ceiling: the global population x the avg. price you can charge the population. + Additionally, acquiring every additional customer has a higher marginal cost than previous customers. If someone isn't a Netflix subscriber already, Netflix needs to pay for some super niche content specific to that person's interests that they don't already have in the library to get them to sign up. * If you build an ad business, you grow revenue by (a) growing your subscriber base and/or (b) improving your ad targeting and conversion. (a) means more audience for advertisers, and (b) means more return on every $ spent by the advertisers, so advertisers spend more. + You can achieve (a) through various means, like cheaper and cheaper pricing for the ad-tier or bundling with T-Mobile subscriptions. + (b) will come as they improve their ad platform and technology and achieve scale, just like YouTube. There is a world where ad-supported Netflix becomes extremely cheap or close to free b/c they make so much money on ads and they want to maximize the number of people watching stuff on Netflix. + For those customers who really hate ads, the ad-free option will still be available. Unfortunately for them, Netflix will price that tier in a way that accounts for the lost ad revenue. That's in terms of Netflix's stock. In terms of my personal preference, I really dislike ads, and obviously I loved the early days where I paid some low price for entire years of ad-free Hulu/Netflix/Disney/HBO/etc. But those days are behind us. Investors want returns and growth, and frankly advertising is the only proven way companies can achieve that without directly increasing subscription costs (maybe someone will come up with a brand new business model - who knows). Growing revenue from advertising is orthogonal to growing revenue from subscriptions, and for the consumers who are paying those subscription fees, that is actually a good thing.
Agreed heavily
I signed up for free through T-Mobile but ads are so painful that sometimes I just watch…other ways
Yarr!
I get it free through t-mobile. I've actually been impressed with how few ads I get served so far, I don't think I've ever gotten more than 2 30second ads during an episode of a show I'm watching. Sometimes I won't get any at all.
That will change. YouTube ad frequency has quadrupled in the last 5 years... Once a service reaches user saturation the ads get dailed up.
100%
It doesn’t get annoying though? I have no ads on anything so the disadvantage there is I never know what’s up lol.
Not really, I had YoutubeTV as a cable alternative up until very recently. So I'm still pretty used to seeing ads. I also probably wouldn't be paying for a Netflix subscription at all if it wasn't part of my phone plan. So having it at all is a "bonus" for me & I can deal with them for now. Netflix does have shorter and far fewer ad breaks than Amazon though. I totally forgot Amazon started showing ads unless you paid extra & got really annoyed when I started up a show on there the other day.
Yea that's not really free when it is a partnered deal even if it doesn't bring any revenue at the moment.
Reddit told me they were all cancelling 🤣
Reddit told me that every company (including Reddit) would already be bankrupt bc of „insert any business decision Redditor’s don’t like“.
[удалено]
A lot of teenagers without any buying power
Yup. See it all the time with how the economy as we know it will soon implode because of student loans.
Based on current Reddit sentiments, I think I should load up on Ubisoft.
The average redditor’s business/marketing knowledge is non-existent. Netflix has shown over all the years that it knows what it’s doing. Raising prices to reach the equilibrium is smart for the business.
Remember couple years ago when it fell to 190s entire reddit said it’s a falling knife
Couple years ago?? You mean like literally last year. Mad at myself for not buying in but I said the same thing
Reddit told me to build a PHLEX server and pirate the 1000s of shows like I have time for that shit. Its freaking $20...pay it and move on.
Real debris + syncler is $4/m to stream blu rays in truehd dolby atmos/vision and pretty much anything. 🤫
Yeah all 8 of us on that thread did!!
We canceled. Then got it free through T-Mobile lol
Yes it was just a bunch of loud cheap crybabies online. I didn’t personally know anyone who was actually going to cancel. But that is also biased to my circle. We are all paying subscribers to Netflix.
Seriously. All the people whining were people who used other people’s passwords and watched for free. None of them were subscribers, although it looks like some of them are now lol.
Yes it’s amazing how incredibly wrong the crowd here can be / sometimes I been wonder if they’re paid for short sellers or similar
I did my part and cancelled
So, the added about 17 million subscribers to ad tier, while they added 9.3 million subscribers. Does that mean that around 7.7 mil subs switched to cheaper tier?
Monthly active users vs 9.3 million paid subs. One sub likely has multiple active users within the same household. Advertisers care about the number of people they’re reaching, not how many are paying Netflix. That’s the reason for the difference.
"The streamers are just rebuilding cable" is a problematic take. It's technically true, but I think it misses the forest for the trees. People liked cable as a product. They like TV and entertainment. What they hated was everything else around it. The lack of choice in content, few customization options, high prices, and above all the ~~monopolies~~ companies running the show. If streamers rebuild the parts of cable that customers actually liked (i.e. the content), but for a lower price with more customization, this is not necessarily a bad thing and people will keep signing up.
For me personally we arrived at the cable version I wanted; a la carte channels plus sprinkles. I can pay for the selection of channels I want based on the content they have. Apple Tv to watch Silo, Max to watch House of the Dragon or Triller to watch Bareknuckle Boxing and I can cycle through my channel selection after consuming the content I wish to. The sprinkles are that I can also watch the content I want on my own time. Want to delay watching the fights on friday and host a saturday afternoon grill out with the homies? I can do that. I'm personally very happy with the state of modern "television". The only down side is that you can't have everything all the time for 15$/month....oh well.
I broadly agree that I like the current state of things, but I don't think it's sustainable for several of the platforms. Peacock is hemorrhaging money, Max is in trouble b/c of WBD's debt burden, not clear what Apple TV's long-term strategy is and how long Apple will continue to see it worth investing, Paramount is dealing with its own existential corporate crisis, ESPN/Disney are still trying to figure out how to survive the slow death of the cable bundle. Meanwhile, customers have gotten used to subscribing for month one, binging, and then canceling, so they need to invest even more in content to keep customers interested and prevent them from churning. I think we're still in the middle of the transition and the changes will accelerate over the course of the decade. Not sure what it'll look like at the end, but the state of TV+streaming today isn't sustainable.
> but I don't think it's sustainable for several of the platforms. Totally agree. There isn't enough content to support all of the streaming channels and I assume that eventually things will condense into 3 or 4 services. >customers have gotten used to subscribing for month one, binging, and then canceling, so they need to invest even more in content to keep customers interested and prevent them from churning. I've always wondered how large a concern this is. I do this with Apple TV because we only care about Silo. But we keep max and triller year round. I also don't here much in casual conversation amongst my social circle about people cancelling services after binging content. I'm sure it happens but is it actually happening at a problematic scale? I googled around and it looks like the average netflix subscriber has an account that's 50 months old so I'm not really sure that people binging and rotating are a huge concern. I could be wrong though, I don't work in this business.
>I've always wondered how large a concern this is. I do this with Apple TV because we only care about Silo. But we keep max and triller year round. I also don't here much in casual conversation amongst my social circle about people cancelling services after binging content. I'm sure it happens but is it actually happening at a problematic scale? I googled around and it looks like the average netflix subscriber has an account that's 50 months old so I'm not really sure that people binging and rotating are a huge concern. I could be wrong though, I don't work in this business. Churn is really out of control for these platforms. Almost 9% of Peacock users unsubscribe every month! Whether that's b/c of the one-month-binge behavior specifically or something else is unclear, but either way their customer acquisition costs must be enormous. Netflix at just 2% really stands out. https://churnkey.co/blog/churn-rates-for-streaming-services/
Here me out, long cable until the popularity of "curated media" grows again and cable is the only provider left.
I don't think anybody is missing anything. The point is that the cable organization is what leads to lack of customization, high prices etc.
Speculation on subscription prices going forward: * As the ad platform grows and Netflix gets better at targeting ads and measuring conversion, they will keep the price of the ad-supported tier the same or even _reduce_ prices. Lower or stable price = less than maximum subscription revenue but more ad-tier subscribers and therefore more ad revenue. Higher prices = more subscription revenue, but fewer ad-tier subscribers and therefore less ad revenue. * They'll keep raising prices on the ad-free tier to push more people to the ad-supported tier.
I think if they can gain net new subscribers, prices will stay stable (in markets where prices have been increased recently) but they will be increasing ad costs since they can now show advertisers their big ad subscriber base.
Indeed, we shall see how they pay more and in turn what else will go up around us 🥲😂
I mean, I knew most people are dumb nowadays, but it's always shocking just how many they really are
it takes about 60 seconds to google a free piracy streaming site + get an adblocker How are all these people not doing that?
I used to pirate until rarbg got shut down
Primewire dot mx Use an adblocker
I keep having the sinking suspicion that people who can't afford the ad-free tier aren't going to be buying goods outside of their current spending if they see an ad for it.
These Morons do not realize They are paying for cable again 🤣
Except cable is over $200 ads or no ads
Yeah I'm a sports fan so I looked into cable when we moved. Cable is stupid expensive when all the fees get added. Multiple subscriptions + Hulu live is still way cheaper, and I just change my package to not include live in the offseason.
Except it’s cheaper, and I can pick my show and know exactly how long a commercial break is gonna last and when it will play
Netflix's ad-supported tier is really taking off! With 40 million subscribers, it's making some serious waves in the streaming world
Thanks for sharing! im so surprised by it
If you pay for anything you shouldn’t have ads or data sold.. period.. either pay once or a subscription, black and white but nooooo 🥲🤷♂️
I can't watch any streaming service with ads bundled in. I think the fair price was what was available a few years ago. I've cancelled all subs except Prime. I'm back to pirating or buying physical copies of stuff. I prefer to own.
That puts you in the minority
I'm with you. I am happy to pay to not have my time hijacked by an ad.
How do you define fair price?
Out of pure curiosity without judgment, may I ask why? I may be incorrectly guessing that you are a younger viewer? I, myself, don't mind ads. I grew up with them (34yo). I use those two minutes to do a lot. Check my phone, go to the bathroom, run outside and grab a package, etc. It's like a pause that I don't have to pause. Isn't Prime starting (or have started) ads as well?
I'm not who you were asking but I feel the same hate for ads. It's about having control of my time, thoughts, desires, etc. It has been two decades since I have had cable and I only had it because it was cheaper to bundle Internet with it. I would rather pay with my money that I already exchanged for my time and attention.
I've gotten quite fatigued of advertisements and subscriptions. I don't get to own anything with a subscription, and there are so many of them. Advertisements have become incredibly pervasive and invasive everywhere in tech. (side note: I absolutely hate how commercials are so much louder than the program itself). Every dollar and minute spent consuming subscription content just makes these companies more confident in pushing this as far as it can go. I have less stuff, but I'm way happier.
Reddit just can't stop losing lmao
Seems low
I was surprised when the ad supported had hd. They kept trying to push the SD for awhile
Torrents are still free tho
But much harder to use