Increasing competition in the streaming world is pushing platforms to explore new strategies to stay on top. Netflix seems to have a new move in mind to maximize his earnings after removed the basic plan of €7.99. Recent rumors suggest that Netflix might increase the price of its ad-free plans, thus directing users to the plan with ads, which is known to be the most profitable for the company.
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What is Netflix's strategy
A price increase for Netflix's ad-free plans might seem like a bold strategy, but it's a calculated move toward the increase in profitability. According to analysts questioned da Reuters, the price increase could occur in the coming months, indirectly pushing users to consider the Standard plan with advertising. This plan, while interrupting viewing with ads, offers a lower cost that could appeal to a larger segment of the audience.
Why the change in strategy?
Netflix has always tried to balance user experience with the need to generate substantial revenue. The news of a possible price increase had already circulated two weeks ago, and now it emerges that the intent would be to capitalize more on the plan with advertising, thanks to the greater revenues per user resulting from the presence of ads.
The market will react only when the information is confirmed. However, the recent history of Netflix shows that the company has successfully navigated similar decisions. In the second quarter, approximately 6 million new subscribers joined Netflix, following the decision to limit sharing of passwords outside of the terms of service, demonstrating some resilience and public acceptance of its policies.
What will happen in Italy?
In Italy, subscription plans range from a minimum of 5,49 € per month for the Standard plan with advertising, a 12,99 euro e 17,99 € for Standard and Premium ad-free plans respectively. The price increase could see a part of users migrate to the cheapest option with advertising, especially in an uncertain economic period.
