Netflix announces a change in subscriber plans for its Canadian customers – sparking some furor. After declaring the “Basic plan” option was going away, searches for “cancel Netflix account” rose 3,233% in Canada.
Changing The Rules
The financial service Walletor analyzed Google search terms. They found the term “delete Netflix” rose by 755%, while “how to cancel Netflix” was up 488%. Statista reports Canada had about 19.3 million Netflix users in 2023.
The “Basic” and “Basic with Ads” plans are no longer listed on Netflix’s user plans list for its Canadian site. Instead, plans start with the “Standard with Ads.” Prices start at $5.99 CAD for the Standard with Ads plan and go up to $16.49 for the Standard without Ads plan.
Netflix said the Basic plans are not available for new or rejoining members. Still, current members on those plans can keep them until they change their plan or cancel their account.
Password Peeves
Netflix users in both Canada and the U.S. were already irritated with the company because of its efforts to crack down on password sharing. Users with Netflix accounts shared passwords with loved ones so they could use the service without paying for an account themselves. According to The Verge, Netflix now charges U.S. customers an extra $7.99 per month to allow another user to access their accounts.
Barrons reports that Netflix said more than 100 million households were sharing accounts, which affected its “ability to invest in programming.” According to Quartz, the news isn’t all bad, though. That crackdown resulted in 100,000 accounts added on May 26 and 27. The increase in subscriptions means the decision to ban password-sharing wasn’t such a bad idea, after all.
Why Delete Basic Plans?
Netflix’s decision to delete its Basic without ads plan altogether is probably a money-saving measure. Granit Mustafa, CEO of Walletor, said, “By veering away from the lowest-priced ad-free tier, the company has the potential to unlock extra revenue per subscriber.”
A less-than-wonderful 2023 was helped by the subscription boost from the password-sharing ban. The company hopes it will get a similar bump from new or returning subscribers choosing a higher service tier from the outset.
According to Quartz, Netflix introduced a cheaper ad-supported plan in November 2022, and it’s been popular. About 5 million users have signed up for that plan in 12 countries. The company has about 74.4 million paid streaming subscribers in the U.S. and Canada, Statista says.
Everybody Loves Streaming
A Forbes Home survey says Americans love their streaming. The survey showed 86% of respondents paid for more than one streaming service, spending $39 monthly. About 54% of respondents say they also share their accounts with others. In comparison, 35% said they would cancel their Netflix accounts if the company banned password sharing or raised its prices.
Interestingly, the Forbes survey also reports streaming users are primarily in the Gen-X and Millennial age group, with Baby Boomers using the fewest services. Another Forbes article says Americans spent over $72 billion on video streaming apps in 2021.
Will Netflix Lose in Canada?
As enthusiastic as people are for their streaming services, will Netflix’s gamble on changing plans in Canada work, or will it backfire? Mustafa says he thinks the company will win in this round of changes. “If we consider a certain proportion of subscribers currently on the Basic plan, the removal of this tier could generate substantial incremental revenue for Netflix within a span of 12 months.”
As with most big changes companies implement, only time will tell the revenue story. Netflix is hoping this one ends happily.
This article was produced by Media Decision and syndicated by Wealth of Geeks.
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