Netflix Tapping Into Users' 'Must Have' Brand Value For More Dollars

Netflix isn’t done. It wants to monetize a bit more from its longtime subscribers -- especially those who had its cheapest ad-free plan, paying $11.99 a month. It will soon be ending this plan.

The company wants subscribers to move up, or down, when it comes to how much they pay per month in its $6.99-a-month plans for its Netflix “Standard with Ads” plan or the pricier ad-free plans: The $15.49/month “Standard” or its $22.49/month ad-free “Premium”plan.

The soon-to-be-gone $11.99-a-month plan, an ad-free plan (which had seen a price rise as its ‘Basic’ plan at $9.99 in October) allowed subscribers to stream in HD on only one device at a time



All this follows its recent password crackdown -- where extra members on an account can be added for $7.99/month.

Netflix realizes that it needs to monetize more money from existing subscribers, especially in the U.S., as its potential for new subscribers has matured.

The subscription video platform has been transforming its business in a big way starting in November 2022, when it launched its advertising option.

Massive growth in advertising revenue is expected as its core group of U.S. subscribers -- who number around 22 million -- are on a curve of steady growth.

Netflix currently has 40 million global ad-supported subscribers.

And what may be the more important metric is advertising revenues. The key measure here, for many, will now reside in the so-called ARPU  -- the average revenue per month per user.

We know the history: For years, Netflix executives had eschewed any thought of advertising options for consumers. We could guess that Netflix executives believed "advertising" would hurt its premium "brand" value as perceived by consumers. 

That has not happened. Instead, all this seems to have cemented Netflix's role as a “must-have” platform in the streaming world.

1 comment about "Netflix Tapping Into Users' 'Must Have' Brand Value For More Dollars".
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  1. Ed Papazian from Media Dynamics Inc, July 8, 2024 at 11:05 a.m.

    Wayne, that 22 million subs number for Netflix's U.S. ad-supported service comes from a survey by HarrisX and is a  projection or estimate-----not an actual count. Also not clear is whether this refers to households or individuals with passwords. If it's households, then the number of likely viewers would probably triple, assuming that  all of the residents had access to the service. It will be interesting to see what Nielsen reports as the service's monthly reach as well as its average minute ratings.

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