Subscription analytics company Antenna estimated that Netflix’s ad-supported tier was its least popular plan in November, when it was launched month, according to the Wall Street Journal. The report sent Netflix’s shares down more than 2.7% in pre-open Tuesday.
Netflix’s Ad-Supported Tier Accounted for Just 9% of New Subscriptions
Netflix’s newly-launched ad-supported tier was its least popular subscription plan in November, according to subscription analytics firm Antenna. Shares of the streaming giant are down over 2.7% in premarket trading following the reports.
The ad-supported plan represented just 9% of new Netflix sign-ups in the US in November, the plan’s launch month. Data by Antenna shows that around 57% of those who opted for the ad-supported plan were people who returned to Netflix or new subscribers, whereas 43% downgraded from more expensive tiers.
Netflix launched the ad-supported tier in the first week of November in a bid to lure new users while trying to minimize the number of subscribers downgrading from pricier plans. The ad-supported plan costs $6.99 per month compared to the platform’s $9.99 Basic plan.
But according to Netflix’s spokesperson, there were certain “inaccuracies” in Antenna’s estimates. She said it is “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.”
According to Antenna, 0.2% of Netflix users in the US were subscribed to the ad-supported tier by the end of last month. Further, the company’s overall subscriber additions in November were lower than in the month before.
“The new plan thus far is not moving the needle” in boosting the average revenue Netflix gets from each subscriber. Is this going to drive new incremental growth? It’s super early.”
– Jonathan Carson, co-founder and CEO of Antenna.
Netflix Joins HBO Max and Disney+ in Launching an Ad-Tier
Netflix is the latest streaming platform that launched an ad-supported plan in the US, joining the likes of Disney+, Hulu, HBO Max, and Paramount+, among others. But as opposed to Netflix, Warner Bros’ HBO Max saw strong results within its ad-supported plan, which accounted for 15% of new US signups in the launch month.
Netflix’s stock jumped significantly in October after the company reported better-than-expected Q3 2022 earnings. The streaming service provider reported 223 million global paid customers at the time, 73 million of which were based in the US and Canada.
The report provided a much-needed boost for Netflix, which lost more than 200,000 subscribers in the prior quarter. But the company’s stock performed decently after the disappointing Q2 report, as investors felt confident in the company’s fundamentals.
This article originally appeared on The Tokenist
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