With everyone feeling the pinch of inflation, many are having to make choices about what to spend their discretionary income on, like which streaming services to keep paying for. In a recent post, we discussed the current exodus of subscribers from Netflix due in part to their rising costs.
To offset this loss in subscriber revenue, Netflix is introducing a new, less expensive ad-based plan in early November. According to Charles Pulliam-More at The Verge, the ad-based plan will only cost $6.99/month and in exchange subscribers will watch an average 4 to 5 minutes of ads per hour. This plan does not include access to the entire Netflix catalog of content, content can not be downloaded to devices, and video quality is capped at 720p / HD.
So how will current Netflix subscribers react to this new plan? Will non-Netflix subscribers be swayed into becoming paying subscribers? And what does this mean for mobile game publishers? Let’s find out.
We surveyed 2,001 mobile gamers, balanced to the US Census, and of those surveyed, 1,286 identified as current Netflix subscribers and 1,333 identified as non-Netflix subscribers.
In short - YES! Incredibly, over 25%, or 1 in 4 current Netflix subscribers are saying that they will in fact reduce their current subscription to the less expensive, $6.99 plan in exchange for watching ads.
Factor in the Neutral responses and you’re now talking about more than 50% of respondents who either will move to the lower tier or, if inflation gets worse, may be motivated to move to the less expensive plan.
Results also showed that over 25% of Netflix subscribers of the Basic $9.99 plan indicated that they were Likely or Very Likely to move to the $6.99 plan. While $3.00 may not seem like much, I think it’s a clear indication that people are closely watching their budget as inflation takes its toll.
While the non-Netflix subscriber respondents constitute a smaller sample size and additional research would be helpful, at 28% saying they are Likely or Very Likely to become subscribers of this new lower priced plan, that has to be encouraging news for Netflix.
Will this new influx of new subscribers be enough to offset current losses? That’s for another survey. But as with any tiered plan, if you can get new subscribers in the door at the lower price, you now have an opportunity to convince them the higher-priced plans are worth their money.
To see the full survey results, click here.
There are two things game publishers can take away from these results:
Understanding player intent can be a great weapon for LiveOps teams looking to improve ARPU and LTV.
Two player measurement areas we suggest investing in are:
Leading indicators such as iAP intent signals can be as easy as a 5-point engagement – and combining this player experience data with behavioral app data (i.e. source, level, LTV etc.) can enrich LiveOps decision making and merchandising strategies.
While Netflix built its brand on the back of ‘Ad-Free’ content, competition and more choices put a hole in their revenue boat. Preliminary research shows Netflix may have found a viable solution to plugging that hole by offering more options to choose from. Only time will tell for certain.
As a game publisher, whether you want to acquire new users, improve user retention, or increase iAPs, it’s important to make sure you’re providing enough options for your prospects and players to maximize monetization.
Top game studios are leaning into player experience insights. The more they listen, the better decision they can make. We help AAA mobile game teams unlock feedback from all players – not just the loud ones – while monetizing with brand surveys.
If you’re interested in learning more about what motivates your players to inform your decision making, we have some exciting solutions to share with you. 
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