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Netflix Netflix (once again) Raises All Subscription Plans in U.S. (1 Viewer)

John Dirk

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I honestly have no idea how any company anywhere can be expected to survive when Wall Street can declare that having over 200 million subscribers is considered a disappointment and the stock loses $50 billion in value overnight. That doesn’t seem to have any relationship to reality.

I agree. The perpetual need for growth and ROI can cause all sorts of scary corporate behavior. Just look at the Boeing 737-Max disaster. They became obsessed with growth and ROI to the severe detriment of their engineering prowess.
Advertisements is the path to least resistance. Why they have not implemented them yet I do not know.
I'd cancel immediately if this happened but it certainly wouldn't surprise me at this point.
 

Desslar

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I think Paramount, yes. Their stated goal is to have one new episode of one of their different Star Trek shows on year-round, and I think there’s an audience willing to pay for that. They’ve also got all of the CBS owned properties (new and old), plus the Paramount film library.

Peacock I think is also in a good position - they have some smart subscription options (a completely free with ads option with limited but still substantial offerings, an ad supported version with even more choices and an ad free version with even more premium stuff) - they’ve got access to all o the different NBC owned brands and channels plus Universal studios, and they were able to license some valuable properties from other studios on the cheap because those studios hadn’t yet set up their services.

I think an interesting thing to keep an eye on in the future is how well or poorly Prime and Apple utilize their “channels” - for instance, you can subscribe to all of these different services like P+ through Prime, and that may be preferable to some users than having to manage individual apps and logins. That could very well be the way of the future, that most customers seek to bundle their subscriptions together under one umbrella.
If I could add Paramount to my Prime subscription for a few bucks more I might do that. But probably would not take the time to separately subscribe to Paramount or Peacock unless they put up a lot of vintage deep cuts from their TV/film catalogs.
 

ManW_TheUncool

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Advertisements is the path to least resistance. Why they have not implemented them yet I do not know. Perhaps they refrained to attract and keep subscribers and get them in a habitual behaviour (and addicted to streaming in the process) of watching the plethora of content that has been provided over the years.

Or put another way to change viewer habits from the older standard cable TV model to the model we currently have from the streaming businesses. Whenever there is a new market companies always have to offer their services at subsidised lower costs to attract and entice customers of changing their habits from the older ones. Without that consumers will just keep to the old model generally if there is no difference in costs.

The low pricing of streaming is what got consumers away from the old model and into streaming.

Now that subscriber numbers have reached saturation now is the best time to bring in ads. Much of their content is viewed by millions so the corporations will pay big money for slots in between shows.

Consumers are conditioned and are used to viewing ads. They are on normal TV and live sport shows whether it be cable or any other traditional model. We see them at the cinema etc.

It's a no-brainer.

I don't think they will lose many subscribers from this implementation. They can even introduce them gradually like one time in a 1 minute slot during each show to begin with.

Over time they can introduce a second 1 minute slot during a show and so on.

I can see adding something like an 1-minute ad at the beginning of each episode or movie (maybe a bit shorter for shorter episodes and longer for feature-length movies), but nothing more than that unless they're doing so via lower priced, ad-supported options (like the other streamers do).

Charging $15-20/month (and possibly more, if there's another hike) and still inserting ads in the middle of programming would definitely be a non-starter for many subscribers -- even ads at the beginning would garner a fair amount of pushback me thinks...

_Man_
 

ManW_TheUncool

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If I could add Paramount to my Prime subscription for a few bucks more I might do that. But probably would not take the time to separately subscribe to Paramount or Peacock unless they put up a lot of vintage deep cuts from their TV/film catalogs.

Don't see why that wouldn't happen since they already do so via AppleTV+... though there's no savings involved in such bundling AFAIK...

_Man_
 

Malcolm R

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It's my understanding that some of the channels offered via Amazon Prime are limited versions of the full streaming site if you were to subscribe directly with the streamer. This seemed to be the case when I added Shudder to Prime last year.

Doesn't bother me too much as there's still more content than I have time to watch, but it might bother some to not get the full menu of content offered by a direct subscription.
 

Josh Steinberg

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I'd cancel immediately if this happened but it certainly wouldn't surprise me at this point.

They wouldn’t remove the ad-free version that we’ve grown accustomed to. They’d simply add a lower priced version with ads to entice consumers who are willing to pay less in exchange for viewing ads. That’s exactly what HBO Max did after a year of saying they wouldn’t.
 

benbess

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I think I would cancel if advertisements were added to all plans, and I've been continuously subscribing to Netflix since they were founded in 1997. I'm currently paying the top rate of $20 a month. They need to cut their spending, not add advertisements.
 

Josh Steinberg

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I think I would cancel if advertisements were added to all plans

There’s no way they’d do that - if they added an ad-supported tier it would be priced lower than their current options and would be designed to entice new viewers, just as HBO Max recently did. There is no chance that they would switch exclusively to an ad supported model.
 

DaveF

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I'd cancel immediately if this happened but it certainly wouldn't surprise me at this point.
I think I would cancel if advertisements were added to all plans, and I've been continuously subscribing to Netflix since they were founded in 1997. I'm currently paying the top rate of $20 a month. They need to cut their spending, not add advertisements.
Netflix obviously won’t make ads standard in full-price subscription service. Why do people invent hyperbolic problems to get upset about?
 

Desslar

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There’s no way they’d do that - if they added an ad-supported tier it would be priced lower than their current options and would be designed to entice new viewers, just as HBO Max recently did. There is no chance that they would switch exclusively to an ad supported model.

Perhaps. But there's a lot of older content on Prime that was previously ad-free but is now ad-supported, and there is no option I know of to remove ads.
 

Josh Steinberg

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Perhaps. But there's a lot of older content on Prime that was previously ad-free but is now ad-supported, and there is no option I know of to remove ads.

That’s because that content is no longer on Prime. It’s on IMDbTV - now called FreeVee - which is a free service that is owned by Amazon and provided via the Prime interface. That may seem like a distinction without a difference but it’s not a simple case of Prime adding commercials, but a more complex one of shows leaving Prime and being carried on an ad-supported service that just so happens to also be offered to Prime subscribers.
 

Desslar

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That’s because that content is no longer on Prime. It’s on IMDbTV - now called FreeVee - which is a free service that is owned by Amazon and provided via the Prime interface. That may seem like a distinction without a difference but it’s not a simple case of Prime adding commercials, but a more complex one of shows leaving Prime and being carried on an ad-supported service that just so happens to also be offered to Prime subscribers.
All very true, but potentially Netflix could create a similar service. Anyway, the end result for the viewer is that an ad-free option for viewing certain content disappears.
 

Josh Steinberg

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All very true, but potentially Netflix could create a similar service. Anyway, the end result for the viewer is that an ad-free option for viewing certain content disappears.

I think that is extremely unlikely.
 

Carl David

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All very true, but potentially Netflix could create a similar service. Anyway, the end result for the viewer is that an ad-free option for viewing certain content disappears.

All streaming companies will always have an ad-free option for subscribers. That's a no-brainer for them.

Just a question of what price they will offer that service going forward. It will be a more sophisticated pricing structure to what it is now.

It will be an ongoing process dependent on how many subscribers will be happy with the advertisement subscription service.

As a rule of thumb the more people willing to pay for an ad-free service the cheaper that service will be.

If it is a small percentage then that fee will be higher. It will be a trial and error on their part of what they can and what they cannot get away with.

Each streaming company will have their own unique brand on what they offer and it may turn out that the quality of content they provide will attract a more dedicated customer base that is willing to pay for their superior service.

Companies whose services are limited might struggle to attract many subscribers to pay for their ad-free content etc.

The battlefield is being drawn as we speak.

I am in no doubt that there will be winners and losers in the battle. There may be some consolidation and mergers and buyouts and perhaps even a bankruptcy.

But I can't see there being as many companies as there is now in a few years. The market has too much competition at the moment all competing in this still fairly new market.

It's still in its infancy and not even a decade old yet.

The chances that many consumers will choose to pay for 3 or 4 monthly ongoing subscriptions simultaneously are are not favourable in my opinion.

Most will have one subscription only as prices go up and as their discretionary incomes decline.

There is one thing I did not add in relation to what the businesses might do to help drive profits.

I also think that the monthly subscription service where consumers can cancel on a whim to suit them and join another service straight away may be prevented or changed slightly in the future.

For example, they might try to offer a minimum 3 month term to their service or maybe offer that at a discount to a month to month basis. (do any of them offer this already?).
 

Josh Steinberg

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It's still in its infancy and not even a decade old yet.

Actually, streaming has entered its second decade by now.

The chances that many consumers will choose to pay for 3 or 4 monthly ongoing subscriptions simultaneously are are not favourable in my opinion.

This is pretty standard behavior for most streaming households.

Most will have one subscription only as prices go up and as their discretionary incomes decline.

Prices are not going to go up substantially, and most streaming households are comfortable with more than a single service. Most people don’t want to be limited to one. They simply don’t want to be forced to have twelve. There’s a sweet spot and that’s somewhere in between. Netflix is a little bit of an outlier with their pricing, but they also break apart number of simultaneous users and technical quality in a way other services don’t do. That also means that the price the headlines site as being the top price isn’t the same price every person is paying. This is all eventually gonna settle into a territory where the average user for the average service can choose to watch with ads for $5-10 a month, or without ads for $10-15 a month.

There may be some changes around the edges about which brand specializes in which kind of content, and there won’t be infinite space for poorly executed ideas no one was asking for in the first place (CNN+), but the concept of consumers subscribing to several services to view streaming content of their choosing and on their own time frame is not going away.
 

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That’s because that content is no longer on Prime. It’s on IMDbTV - now called FreeVee - which is a free service that is owned by Amazon and provided via the Prime interface. That may seem like a distinction without a difference but it’s not a simple case of Prime adding commercials, but a more complex one of shows leaving Prime and being carried on an ad-supported service that just so happens to also be offered to Prime subscribers.
All of this brand confusion is only going to grow more problematic for Prime going forward. Especially with new high profile content like "Bosch: Legacy" that will be ad-supported even if you're watching through the Prime Video app. IMDbTV should have been rolled into Prime Video, and then Prime Video should have just had an ad-supported tier added underneath.

I think the only reason they didn't go that route is that Amazon's main goal with Prime Video isn't to be the most successful streaming service, it's to lock people into a Prime membership so they buy more stuff on Amazon with the free two-day shipping.

A cheaper ad-supported tier would upend the whole economics of Prime memberships in ways that Amazon is probably still sorting through.
 

Carl David

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Prices are not going to go up substantially, and most streaming households are comfortable with more than a single service. Most people don’t want to be limited to one. They simply don’t want to be forced to have twelve. There’s a sweet spot and that’s somewhere in between. Netflix is a little bit of an outlier with their pricing, but they also break apart number of simultaneous users and technical quality in a way other services don’t do. That also means that the price the headlines site as being the top price isn’t the same price every person is paying. This is all eventually gonna settle into a territory where the average user for the average service can choose to watch with ads for $5-10 a month, or without ads for $10-15 a month.

You could be correct in your predictions there but it will probably depend on a few factors.

Ultimately, it will depend on how many companies survive and which ones do not.

Although this is an educated guess on my part and not based on any actual figures that I have seen but my price range is more around $10-$15 per month with ads and perhaps $20-$25 per month without which is not a major difference from what you are saying.

I think once the dust settles the remaining few companies will be in a position to price their services to reflect fully the costs and risks of doing business.

Competition is keeping prices low at the moment and companies like Amazon are preventing the likes of Netflix from raising their prices any further than what they are now.

Amazon probably more than any other company with perhaps the exception of Apple can continue to lose money on the service as it is not their main focus of revenue/profits much to the detriment of the companies that are primarily a streaming business.

My thinking leads me to believe that Amazon will probably be one of the few companies left after the fallout along with offering the cheapest service to consumers too.

It's an interesting dynamic that will be fascinating to see play out.

We might even get a bizarre situation where the dedicated streaming firms like Netflix disappear and the conglomerates like Amazon and Apple are the ones left at the table.

I wouldn't even be surprised if Netflix gets bought by Amazon.
 

John Dirk

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Netflix obviously won’t make ads standard in full-price subscription service. Why do people invent hyperbolic problems to get upset about?
I agree it's extremely unlikely but, since I'm not in their inner circle, I have no idea what they may or may not eventually do. Regardless, I'm in no way upset. I just presented a simple "if/then" scenario as a direct response to @Blu Eye 's comment, which made no mention of a tiered approach.
 
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DaveF

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Perhaps. But there's a lot of older content on Prime that was previously ad-free but is now ad-supported, and there is no option I know of to remove ads.
Amazon Prime is not a good examplar for understanding the future of streaming, in my guess. It's a dessert topping and a floor wax! It's "free" shipping and a streaming service. It's a confusing UX mess of "Prime" the paid service that gets you streaming content and also "Amazon" the giant online store that wants to sell you more content not available through a "Prime" subscription. It's further confused with the option to buy access to more content by subscribing to their second streaming service FreeVee (nee IMDBTV) and also third-parties (e.g. Starz) via Amazon. And also, as Josh explained, content comes and goes from Amazon's service. It might have been in Prime last month but is now locked into some other paid service. Amazon's system seems to be considered by many the worst designed for normal humans to use.

Apple suffers from this also: They are both AppleTV+ the streaming service with originals like Severance and For All Mankind and it is also AppleTV the aggregation system to "simplify" your library by letting you access all your other subscriptions and also it's the UI to digital content you bought or could buy from iTunes or MoviesAnywhere and etc.

And in all cases the Search function doesn't always find the best quality in what you're already paying for.

Contrast to Disney, Netflix, HBOmax, where you pay for that service and you get that content. There are very few offers to sell you stuff you thought you'd already paid for. And those I think are obvious: new-release concurrent with theatrical to get brand new movie.

The middle-ground, which I see in Peacock, is also obvious: the first two seasons of Parks and Rec are free with the ad-supported, no-cost subscription, and the rest of the series requires a paid subscription.

All very true, but potentially Netflix could create a similar service. Anyway, the end result for the viewer is that an ad-free option for viewing certain content disappears.
Anything is possible. But I think this new pattern of two-tier service with low-price/ad-supported and high-price/no ads is here to stay.

Hulu, I belive it was, has found ad-supported is a real money generator for them. Disney is adding it to boost subscriber base. Netflix is talking about doing it now in reaction to their Wall Street woes.

But for two generations of viewers accustomed first to skipping commercials with DVRs and now having ad-free streaming, there's no going backwards. Moving to a high-price/(unskippable) ad-supported streaming, returning to the bad-old-days of '90s cable, I think is a no go.
 

DaveF

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...

I also think that the monthly subscription service where consumers can cancel on a whim to suit them and join another service straight away may be prevented or changed slightly in the future.

For example, they might try to offer a minimum 3 month term to their service or maybe offer that at a discount to a month to month basis. (do any of them offer this already?).
I like this question a lot. It's been on my mind too

It’s super easy to cancel and renew streaming service subscriptions. This is great for users to manage costs by subscribing to what they’re watching only when they’re watching.

The content gameplan for services, exemplified by Disney+, is to always have a must-watch season running.

But are there any signs that the streaming services will also make it harder for users to cancel / renew?
  • Go the New York Times route and force you to chat with Customer Help to justify your personal life decisions before you cancel?
  • Threaten to delete your vewing history and wishlist after only three months without renewal? (Netflix says I've got ten months before they delete my account.)
  • Running multi-month or annual subscription pricing (I keep sticking with Hulu because of the annual pricing)?
 

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