Streaming giant Netflix hoped that its ad-supported plan would increase its numbers and make it more money, but reports say that not many people are buying into it yet.
The company rolled out the tier in November and only nine per cent of the new subscribers chose the ad-supported plan. For comparison, 15 per cent of new signups on HBO Max opted for the ad-supported tier the first month that it launched it. Although, HBO Max may not be a good measuring scale given recent developments.
In addition to the poor turnout, there are reports that Netflix is paying advertisers back because it failed to give them the impressions it had promised.
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Meanwhile, the company is not yet bothered about how the plan to rejuvenate its earning started off. “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,” a spokesperson said.
Jeremi Gorman, Netflix’s president of worldwide advertising, further clarified that they are playing a long game. “I think the biggest obstacles will actually be a temptation to rush into that perfect experience without laying that foundation first. I think it’s really important that we remain committed to getting things right, like measurement, delivery, all of those basics,” he said in an interview.
There appears to be hope for Netflix ad-supported tier in the long run as several competitors have high per cent of their users opting for the cheaper plan. The only issue here is that Netflix started off as a premium package and it will be an uphill task to get longtime subscribers to consider watering down their viewing experience for just a few dollars. Its best bet is on new subscribers.
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