Netflix began to guide new users in Canada to subscribe to a low-cost plan with ads
Subsequent to the declaration last October that heralded the launch of an advertisement-supported low-cost subscription plan across 12 global regions, Netflix appears to be strategically positioning this lower-priced subscription model to supersede the originally uninterrupted, ad-free basic subscription plan.
As reported by TechCrunch, new subscriptions to the basic plan are no longer available on the Canadian Netflix website. The options currently available to users are either to select a cheaper subscription plan replete with advertisements or to opt for the premium, standard plans at a higher fee.
On the technical support page, Netflix elucidates that existing users of the basic plan will essentially remain unaffected. However, should they cancel or change their subscription, they will be unable to revert to the basic plan. Consequently, their only options would be a subscription plan inclusive of advertisements or subscribing to other plans at an escalated fee.
At this juncture, it remains nebulous whether Netflix is utilizing the Canadian market as a test to gauge actual user reactions, thereby determining whether to replicate the same in more markets, in an attempt to subtly guide users towards opting for the lower-priced plan accompanied by advertisements or choosing more advanced plans at higher fees.
Clearly, this strategy correlates with Netflix’s current ambition to strike a balance between expenditure and revenue. As more and more individuals avail themselves of Netflix services, the company finds itself compelled to scrutinize whether the structure of service plans needs readjusting. This need is particularly accentuated given the increasing trend of account sharing, escalating costs paid to film merchants, and the rising costs associated with producing original content. Therefore, balancing revenue and expenditure through adjustments in the billing system becomes crucial.
Thus, in addition to altering the shared usage policy among family members, thereby curtailing non-family members’ shared account usage, Netflix aims to attract more users by offering an ad-inclusive low-cost plan. By temporarily closing applications for the basic plan, the company can guide the user traffic toward higher-priced plans or towards the ad-inclusive, cost-effective plan.
