It seems that Netflix has succeeded with its new business model. The cheapest plan with ads offered by the streaming platform has already exceeded one million users despite its slow start in November. The audiovisual content company believes that this plan will be one of the pillars of the company’s economic growth.
After arousing much reluctance after its announcement, Netflix’s Basic plan with ads grew more than 500% in the first month and 50% in the second. This new, cheaper plan also accounts for around 20% of new service registrations in the United States, according to a report to which Bloomberg has had access.
After doubling the main plan of its service in recent years, Netflix launched a new cheaper option last fall with a subscription price of 5.49 euros per month, in exchange for including advertising, lowering the reproduction quality and remove some of the titles from the catalogue. The company’s idea with this new model was to offset the loss of revenue from fees with advertising revenue.
Many analysts predicted that many customers would prefer to pay less and thus downgrade their plans, but the company was convinced that this would not pose a real problem to their accounts.
In the United States, similar economic plans from other platforms such as Hulu or Peacock have a long history among users, as well as other services that also include advertising such as Tubi, Pluto or the giant YouTube. Netflix has reached the figure of 74 million users in the United States.
In the first months since the introduction of this new plan, Netflix has been able to deliver the promised economic results to its advertisers, according to Bloomberg.
The next litmus test for the streaming company will be when the persecution of account sharing also spreads to the United States. Let’s remember that Netflix announced in Spain at the beginning of February that it would no longer be possible to share a subscription with people who lived outside the owner’s home.
Potential new revenue from advertising, coupled with a radical curb on password sharing, coupled with a reduction in company production spending on new shows, have led many of the biggest skeptics on Wall Street to change their minds. about the company.
In this sense, the renowned analyst Michael Nathanson has raised his particular target price for the company by $64 since the implementation of his economic plan.
