Netflix’s Big Gamble on Commercials Flops with Consumers in Its First Month: Study

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Netflix’s big gamble with commercials so far appears to be flopping with consumers.

The ad-supported plan, introduced in November, was the least popular Netflix tier during its first month of availability, accounting for just 9 percent of new signups, according to a new study from the analytics firm Antenna, as reported in The Wall Street Journal. Overall, around 0.2 percent of Netflix’s overall subscriber base in the United States is estimated to be on the ad-supported plan.

Netflix’s new tier costs $6.99 a month — the least expensive plan that the company offers. But in addition to the inconvenience of commercials, the tier excludes some of the streamer’s most popular titles, including the latest season of The Crown.

The disappointing results stand in contrast to competitor HBO Max, which unveiled its ad tier for $9.99 a month in June last year. Antenna said the tier drove 15 percent of new HBO Max signups in the U.S. during its first month.

Netflix has been showing signs that its ad-supported plan was falling short of expectations. As Breitbart News reported, the company has found itself in the  embarrassing position of giving money back to advertisers after failing to make viewership targets.

Netflix disputed Antenna’s findings, saying the study contains inaccuracies and doesn’t portray the full picture of how the ad-supported tier is performing.

“It’s still very early days for our ad-supported tier and we’re pleased with its launch and engagement, as well as the eagerness of advertisers to partner with Netflix,” the streamer said in a statement to the Journal.

Netflix has embraced commercials as a way to tap into the advertising revenue market as it continues dealing with a weakening subscriber base. This year, the streamer experienced an unprecedented two consecutive quarters of net subscriber losses, ushering in a period of layoffs and cost cutting.

Netflix still has a production deal with Barack and Michelle Obama to produce documentaries as well as scripted content. The streamer also has partnered with Meghan Markle and Prince Harry to create content, including the ex-royals’ poorly received docuseries about themselves.

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