Although Netflix has long operated as an ad-free platform, in November of last year the company’s management decided to introduce a cheaper subscription option with ads. The streaming company was thus trying to reach more customers and get a new source of income at a time when the competition in the market was gaining strength.
In half a year, the cheaper subscription attracted a record number of people. Five million is a very high number, especially considering that Netflix with advertising is only offered in select markets. There are 12 of them in total and the United States is among them, Reuters reminded.
Thanks to advertising, customers save, they pay seven dollars (CZK 153) per month for the streaming service. Tariffs without advertising start at a price of ten dollars (219 CZK) in the USA. In the Czech Republic, where there is no special offer with advertising, subscription prices range from 199 to 319 CZK per month.
Interest in Netflix is not as high as expected
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It was expected that there would be even more subscribers
If we don’t divide subscriptions into ad- and ad-free categories, overall Netflix was expected to do even better. In the first quarter, streaming movies and series attracted 1.75 million new subscribers to this platform.
Netflix was originally expected to gain an additional 2.06 million subscribers in the aforementioned period, but that did not happen. On the other hand, at this time a year ago, the company lost 200,000 subscribers, according to the company’s earnings report released in April. This, by the way, was the first decline in the number of subscribers in more than a decade.
According to estimates by MoffettNathanson, Netflix will gain almost nine million subscribers in 2022, which is half the number of the previous year – when there were 18 million. Most new customers come from Asia.
In the first three months of this year, Netflix increased its sales by almost four percent year-on-year to 8.2 billion dollars (175 billion CZK). However, net profit fell by about 18 percent to $1.3 billion.
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