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Last Tuesday, Netflix presented the results for the last quarter of 2023. In the final months of the year it added 13.1 million new subscribers worldwide, the highest quarterly growth in its history only behind the first quarter of 2020, in full confinement.
It already has 260.2 million subscribers.
It also beat earnings forecast for this quarter.
Gone is the barrage of complaints and bad omens that many users launched online when they announced that they would have to pay extra to share the account outside the home.
Not only has the apocalypse not arrived on Netflix.
Like the rest of the decisions it has made in recent times, it has meant that the company now has many more subscribers and continues to be the only international platform with profits.
Four out of 10 new users in the last quarter of 2023 chose its cheapest option, the one that includes ads.
This subscription plan already has 23 million unique monthly users, compared to the 15 it had in November.
In fact, another of the changes that were communicated last week was that the basic subscription without ads will disappear in spring in Canada and the United Kingdom.
Although this option was no longer offered for new subscriptions, those who had contracted it have been able to keep it, an option that will gradually disappear so that users either pay more to continue without ads, or switch to the option with advertising.
More information
The platforms raise their prices.
How much?
Because?
Netflix was not the first payment platform to offer an ad-supported version.
In the United States, HBO Max, Paramount+, Peacock and Hulu had that option before it.
But it was the first major global platform to extend it to the entire world.
It did so at the end of 2022, ahead of Disney+, whose ad-supported version arrived in Spain in November 2023, a year after its streaming
rival
.
The expansion of advertising on payment platforms is increasing.
Warner Bros. Discovery is already following that path with Max, the service that will arrive in Spain in spring as an evolution of HBO Max.
In February it will do so in Latin America with three versions: basic plan with ads, standard plan and platinum plan.
Although it has not yet been specified what it will be like in Spain, this division can give an idea of where the shots will go.
This Monday, January 29, Amazon Prime Video activates its version with ads in the United States, Canada, the United Kingdom and Germany.
It will arrive in Spain throughout 2024 in a second phase of expansion.
And it will do it in a somewhat different way that could mark an important change in the market.
All current Prime Video accounts in those countries will automatically be ad-supported, and users will be offered the option to pay $3 more per month to not see ads.
'Welcome to TV!', #Atresmedia's message to #Netflix and other platforms for starting to broadcast advertising.
Install an #advertising banner in Madrid before the launch of the first rates with ads from #streaming companies.
#marketing #advertising #ads pic.twitter.com/0vSnWwNhks
— Antonio J. Padrón (@AntonioJPadron) November 9, 2022
It is a movement that has put managers and analysts on alert because it is assumed that the vast majority of subscribers will stay in the version with advertising, with which Prime Video, in essence, will become the largest payment platform with ads in the television industry.
And by the way, Amazon will begin to earn millions of extra dollars from the income from that advertising.
An extensive report from
The Hollywood Reporter
On this matter, it included the estimate of two economic analysts that the company will generate between 2,000 and 3,000 million dollars from this advertising in the first year.
And they both agreed that the overwhelming majority of users will choose not to pay more to remove ads.
All this could once again change the rules of the
streaming
game .
Another platform that goes down the path of combining payment and ads is ViX.
TelevisaUnivision's streaming
service
was born as a free platform with advertising to later launch ViX Premium, paid and without ads (except for some specific content).
They have recently announced that in the United States they will launch another option, ViX Premium with ads, in which in exchange for a "moderate advertising load", the premium service can be accessed at a lower price.
Price increase
What will be Netflix's next step?
Everything indicates that a new price increase is approaching.
“As we invest more and improve Netflix, we will occasionally ask our subscribers to pay a little more to reflect those improvements, which in turn helps drive additional investments to further improve and grow our service,” said the letter sent by the company. company to investors last Tuesday.
It is not difficult to extract from these words that a new price increase is approaching, and that will again lead more people to the cheapest option on the platform, which is the one with ads.
And that is what Netflix is most interested in growing so that advertising generates more profits.
Another important step is the shift it is taking towards broadcasting live events.
Also on Tuesday, Netflix announced that, starting in January 2025, it will broadcast exclusively in America and the United Kingdom the weekly stellar American wrestling show,
Raw
, which had been broadcast on traditional television for 31 years.
The agreement will allow it to broadcast WWE content in other countries.
Before, on March 3, the Netflix Slam will take place, a friendly in Las Vegas between Rafael Nadal and Carlos Alcaraz that the platform will broadcast live.
Television continues to change and Netflix continues to set the pace.
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