Netflix announced in its Quarter 1 earnings call that they will be looking into providing cheaper ad supported subscription services that will allow users to save a few dollars in exchange for having advertisements in the shows and movies they watch. The move follows other streaming providers desire to provide a similar service at a lower cost. Those who cringe at the idea need not worry as they can continue to pay full price for a commercial free experience.
The move certainly comes at an interesting time as Netflix shares tumbled with the announcement that for the first time in a while subscriber are way down as they have started to price itself out of being super affordable. Before even low-income families can fork over $8 every month to have the streaming service, now it can cost up to $20, sure the quality has gone up but that is hardly the point if you cannot afford it. Even if you can, there are so many more options to chose from that you may just opt to take your business elsewhere.
If Netflix is willing to take such an approach why stop there? Why not provide a free version with products released on a delayed schedule in more developing countries. Such a move would open to new customers who otherwise would not be able to afford it. It may also stop password sharing as they have less of an incentive to do so.
There is also a precedent set that advertisement revenue in streaming works, one only must look at YouTube for proof, it is arguably the most popular streaming service used and despite having an add free subscription model most of its users still use the free version.
It will be interesting to see if customers embrace add streaming services, we do it with television, so why not streaming to help ease our budget.
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