Football, wrestling and immersive experiences: This year, Netflix has expanded beyond its usual scripted and reality TV offerings.
Last quarter, the company reported a record high of 269.9 million subscribers, far outpacing streaming competitors like Disney+, Peacock, and Max (which is owned by Warner Bros. Discovery, CNN’s parent company), fueled in part by the company’s recent effort to push users who share passwords to create their own accounts.
However, the short-term subscriber jolt from the password-sharing crackdown could soon fade. The company recently disclosed that it would stop sharing its quarterly subscriber numbers beginning in 2025.
In the never-ending battle for eyeballs between traditional media companies and newer entrants like YouTube and TikTok, Netflix has, in the past two months, pushed further into the world of live sports programming and experiences.
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And with Netflix’s recent advance into advertising, the company is starting to look closer to the traditional media companies it seeks to disrupt, said Tim Nollen, a Netflix analyst at Macquarie.
“Whatever the old broadcasters were in their best of times, Netflix is becoming that in a new and probably longer-term, sustainable way,” he said.
In May, Netflix disclosed that it has 40 million monthly active users on its new ad-supported subscription tier, a jump from 23 million in January.
Netflix reports second-quarter earnings on Thursday after the bell, likely further shedding light on its strategy.
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Netflix is pushing further into the world of live sports programming and experiences.
The early stages of Netflix’s evolution
Netflix made its biggest sports announcement yet in May. The company made a three-year deal to broadcast the NFL’s Christmas Day games. The deal kicks off this year with Netflix globally airing two NFL games on the holiday. In 2025 and 2026, Netflix will stream at least one holiday game.
“Netflix is now in live sports,” Nollen said. “This means Netflix might be the only place you will be able to watch those two Christmas Day games, which could obviously add more subscribers.”
Airing football games has proven itself to be a winning strategy to juice subscriber numbers: In January, Peacock, NBCUniversal’s streaming service, saw a jump of 2.8 million sign-ups in the three days leading up to its exclusive airing of an NFL playoff game.
The event was “the single biggest subscriber acquisition moment ever measured” by Peacock, according to the company.
Earlier this year, Netflix also announced another high-profile foray into sports programming: A 10-year deal to air “WWE Raw” live, valued at more than $5 billion.
But sports aren’t the only way Netflix is trying to expand its footprint. Last month, the company said it plans to open two massive entertainment venues called Netflix Houses.
The “experiential” complexes, in former department store locations at Dallas Galleria and King of Prussia mall (near Philadelphia), will each span more than 100,000 square feet and include events, themed gift shops and restaurants. Both will open in 2025.
While these complexes don’t quite reach the scale or footprint of Disney’s or Universal’s global theme parks, David Joyce, an analyst at Seaport, said the complexes are designed to drive brand loyalty.
“It should help retain those customers and keep them in the Netflix ecosystem and paying for their subscriptions for longer,” he said.
Netflix cancels cheapest plan as subscribers have to choose
Narrower choices
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Netflix is finalizing its plans to completely phase out its cheapest ad-free subscription tier for its existing subscribers, reports Giant Freakin Robot. The company is now asking its users to choose a new Netflix plan to continue watching content on the world's largest streamer.
The Choice To Add More Fees Or More Ads
Netflix users took their dissatisfaction with Netflix's action to Reddit, where they discussed the new development. Apparently, those subscribed to the Basic Netflix plan, which is currently priced at $11.99 per month, will soon have to choose to either switch to a new Basic plan priced at $6.99 or a Standard plan for $15.49. Seems like a no-brainer, considering that the new price of a Basic plan is now more than 40% cheaper, but the downside is that the new Basic plan is supported by ads.
Back To Not-So-Basics
Yes, you read that right: The new Netflix plan, the one we previously paid for to avoid pesky advertisements, now contains the ads. However, the equivalent service to the soon-abandoned Basic plan is now called Standard, and its price went up by almost 30%. Now, it's important to note that most of the users receiving notifications about the price hike are located in the U.K. and Canada. This actually reflects Netflix's previous announcement regarding the discontinuation of the old Basic plan we all came to love.
Forcing The Hands Of Subscribers
However, the company still hasn't revealed when it will phase out the Basic plan for the existing U.S. subscribers and implement the new Netflix plans and prices. The newly formed subscription plans are priced at $6.99 for the ad-supported Basic plan, $15.49 for the Standard, and a 4K Premium plan that is completely ad-free and costs $22.99. But—and there's always some "but" rearing its ugly head—things aren't really as they seem, as more and more companies engage in mandatory arbitrations.
Targeted Advertisements Are To Be Expected
Namely, Netflix is now increasing the price of its former Basic plan and renaming it into Standard. Simultaneously, the company is introducing a new, ad-supported Basic plan, which, while more affordable, also implies that the company will collect data about its viewers and serve up ads based on the data it collected, thus earning not only money from subscriptions but also from advertisers. So, you can either pay more money for a new Netflix plan or choose a more affordable one and suffer all the annoying ads that go with it.
Know What You're Paying For
Sure, users can always purchase a 4K Premium for the ultimate experience, but as a prominent Right to Repair activist explained, Netflix only streams 4K content to its closed-source application that comes installed in closed-source Smart TV sets. Otherwise, it's 720p for $22.99—the cheaper Standard plan will still deliver 1080p for $11.99, regardless of where and how you watch Netflix. So, while it's well within the company's rights to introduce new Netflix plans, it's important to note that the service delivered isn't always what the service users pay for.
Right to Repair and consumer-protection advocates aside, it's only a matter of time before the new Netflix plan reaches U.S. subscribers. There's no mention of the European Union anywhere, and EU subscribers are currently paying $5.40 for a Basic ad-free plan.
This story was produced by Giant Freakin Robot and reviewed and distributed by Stacker Media.