Netflix launched its much anticipated ad-supported tier last month, and it looks like no one wanted it.
This is all according to a new report from market intelligence firm Antenna. The data from Antenna shows that the new Basic with Ads plan was the least popular sign-up option for Netflix in November. Is anyone really surprised?
From May to October, about 40% of new sign ups were for the Basic plan, 31% for the Standard plan and 29% for the Premium plan. In November, those numbers were pretty similar actually. The Basic with Ads plan saw 9%, Basic jumped actually to 41%, Standard dropped quite a bit to 24% and Premium dropped to 25%.
This shows us that more people were looking to get in on the cheaper Netflix plan, but not necessarily one with ads. Since the Basic plans combined for 50% of new sign ups.
So how does this compare to the competition? Well in the first month that HBO MAX was available with ads, about 15% of new sign ups were for the ads plan. But it was also significantly cheaper than the ad-free tier. About 30% less. Whereas, the Netflix Basic with Ads plan, is not that much cheaper.
It’s still early for Netflix with ads
It’s a good idea to take all of this with a grain of salt though. Since the ad-supported plan from Netflix has only been available for about a month and a half at this point. But we have heard that Netflix is not seeing the impressions it expected, and has been refunding advertisers because of that.
The future for Netflix is likely still offering an ad-supported plan. But there’s two things Netflix needs to work on before they can expect to get a major part of its subscribers on ad plans. Firstly is, making sure that their entire library can be shown on the ad-supported plans. Currently, most of the programming they have licensed does not include being shown with ads. So it’s not included in the Basic with Ads plan.
The second thing is, making an ad-supported plan for the Premium and Standard tiers. The Basic tier is super basic, only allowing for one screen and watching in 1080p resolution (which is actually new, it was limited to 720p until a few months ago). For some, it doesn’t make a lot of sense to buy the Basic with Ads plan, when they have a family that is going to be watching on multiple screens. The Standard and Premium plans make better sense for them.
Netflix isn’t going to drop its plans for ads. Not this quickly, after how much they spent on ads. But it’s not being adopted as fast as Netflix had hoped.