Netflix announced a restriction on the availability of the cheapest monthly tariff plan, which provides for the absence of advertising.
The streaming industry giant’s basic tariff plan is no longer available to virtual platform customers in the US and the UK. The cost of this package of services is $9.99. At the same time, those users who previously subscribed to the basic tariff plan can continue to consume content within this client solution until it is changed or completely canceled. So far, the streaming service has not completely abandoned the cheapest package of services, limiting itself to canceling the possibility of access for new clients.
On Wednesday, July 19, a message was published on the company’s website stating that the basic tariff plan is no longer offered to new or joining members of the corporate streaming community.
Currently, new Netflix users can subscribe to a premium package of services, the monthly fee in the case of which is $19.99. Also available to this category of consumers is a standard tariff plan without advertising for $15.49 per month and the same offer, but with advertising, at $6.99.
The streaming service launched the cheapest package of services, currently, available last year. The company actively encourages users to subscribe to a tariff plan that costs $6.99 per month. Netflix informed media representatives that service packages that provide for the viewing of advertising materials are more valuable for consumers given the breadth and quality of the digital platform’s catalog. The company did not specify what kind of benefit in this case concerns users, but its commercial interest is obvious. The action of the tariff plan with advertising brings the streaming service more revenue compared to the financial performance of other service packages. This is an elementary commercial logic, which consists of the fact that advertisers pay more than the usual consumer of content.
Netflix Chief Operating Officer Greg Peters in January of this year, during the earnings report, said that the level of user engagement in the tariff plan with advertising is similar to the indicator that is typical for other service packages. He called this result a promising sign that the company provides a good experience that turned out to be better than initial expectations. Greg Peters also stated that the introduction of a tariff plan with advertising is a fundamental starting point for the operation of a streaming service.
Service packages that provide viewing of advertising materials are a common solution for virtual platforms with media content. For example, in April, the streaming platform Hulu launched a tariff plan with advertising. This solution allows the company to maintain a high level of brand relevance and earn more.
As we have reported earlier, Netflix Begins Password Sharing Crackdown in USA.
