faycari nairia lateenah
Priamo Gregory
The basic plan is not displayed as an option for U.S. subscribers on its Plan and Pricing page for U.S. customers. The company quit offering the basic plan for new subscribers in July 2023, but allowed basic plan customers to remain on the subscription so long as they didn't cancel or change plans.
Netflix, which began offering a "standard with ads" tier in November 2022, said the plan's "attractiveness" led to a 34% increase in ad-supported subscriptions from the prior quarter. The company reported a record 277.65 million subscribers across all tiers in the second quarter, up 16.5% year-over-year.
Netflix subscribers in the U.S. and in France who are currently on the Basic plan will have to choose a new plan, the company said in a statement to USA TODAY. Those members impacted will get an email starting today, the company said.
Even without the basic, ad-free offering, Netflix represents "a very strong offering for our members," when you consider the $6.99 monthly ad-supported option, said co-CEO Greg Peters, during a videoconference about the company's second quarter performance Thursday.
"Essentially, we're providing them a better experience: two streams versus one. We've got higher definition. We got downloads. And, of course, all at a lower price," he said. "And for members who don't want that ads experience, they, of course, can choose our ad-free Standard or Premium plans."
Netflix added more than 8 million subscribers in the second quarter, benefiting from the return of series such as "Bridgerton," and "Baby Reindeer" and the live event "The Roast of Tom Brady," as well as a password-sharing crackdown.
Total number of subscribers grew to more than 277.6 million, an increase of 16.5%, the company said. Netflix forecast lower subscriber additions in the current quarter (July-Sept.) than in the same period last year, when the streaming company added more than 8.7 million.
Somewhat similarly, when Starbucks raised its prices during the beginning of 2010, it lowered the price of a tall regular to $1.70. But, if you wanted a splash of foam, a shot of espresso, or a touch of flavor, the addition could be expensive. For a triple grande soy vanilla latte, you would have paid a whopping $6.25. Their goal, I suspect was to attract coffee lovers who would spend a little and those who would spend a lot. For a basic cup of coffee, the price would be low. However, those who were willing and able to pay more would also be satisfied. In that way, Starbucks could retain a dual clientele.
Netflix and Starbucks are engaging in what economists call price discrimination. Defined as selling the same (or almost the same) good or service at different prices, price discrimination differentiates among customers. The perfect example is movie tickets. Movie theaters discriminate by charging senior citizens less.
In economics textbooks, price discrimination is typically discussed in chapters on monopoly. A monopoly and a smaller firm with a unique good or service have pricing power that enables them to target different customers with their prices and coupons. The other economic idea we can cite here is elasticity. The following econlib graphs show the difference between the people opting for $6.99 (the Normies) and those that stick with the pricer possibilities (The Nerdies):
My soiurces and more: My Saturday favorite, the Slate Money podcast alerted me to the Netflix decision. From there, for detail, CNBC and NY Times articles were ideal. Then, do take a look at the past econlife that had my Starbucks facts and this Econlib on price discrimination.
Depending on your subscription plan, the price hike adds up to an extra $24 or $36 you pay each year to the streaming service. Below, CNBC Select shares some ways to save on (and even benefit from) your Netflix subscription.
While you're unlikely to be happy about paying a higher monthly Netflix bill, it does mean you earn a bit more from that 6% cash back. Amex's cash back is earned in the form of Reward Dollars, which cardholders can then use as a statement credit to lower their credit card balance.
And with the U.S. Bank Cash+ Visa Signature Card, cardholders can choose to earn 5% cash back on two bonus categories each quarter, on their first $2,000 in combined eligible net purchases, then 1%. Television, internet and streaming services are counted as a bonus category and U.S. Bank's website lists Netflix as a sample qualifying merchant. Again, you can use this cash back to essentially lower your credit card bill.
T-Mobile has a "Netflix On Us" deal where qualifying cell phone plans get a free Netflix subscription. Those who aren't happy with their current cell phone provider should consider this benefit, which not only makes Netflix complimentary but also consolidates your streaming and cell phone bill.
Netflix allows you to pause your membership and come back to it. This can give you a break from the monthly subscription if you're looking to cut costs or if you're just not watching a particular show at the moment.
You just have to connect the bank account you use to pay your Netflix subscription to Experian Boost, and Experian will add your payments to your Experian credit file. Consumers can link positive payment data as far back as 24 months. Experian Boost also includes access to your FICO Score and Experian free credit monitoring that alerts you to changes on your credit report, such as new account openings in your name and balance updates.
Basic and Premium plan Netflix subscribers will now pay a little more each month for the streaming service. To help save on this cost, get a credit card that rewards streaming purchases, switch your phone plan to T-Mobile or take a pause on your subscription. And, while you're paying more for it, make sure that monthly Netflix bill is helping your credit with Experian Boost.
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every personal finance article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of personal finance products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
You know the story. Back in 2011, Netflix restructured their pricing in a big way. They unbundled streaming plans from the traditional DVD-by-mail business, increasing the price of the combined offering from $10 a month to $16 a month. And they rebranded their DVD-by-mail business to Qwikster.
Fast forward to present day. In October of 2017, Netflix announced another pricing change. They raised the price of their core Standard plan from $9.99 per month to $10.99 per month. This change crossed a critical threshold in the minds of consumers and create a sizable gap in price between Netflix and Hulu Plus (which rings in at $7.99 a month).
Netflix could have taken their pricing windfall and called it a day. It would seem prudent to avoid rocking the boat knowing that the competitive landscape was about to get tougher as consumers would now have the choice of new streaming services from Apple, Disney, CBS, YouTube and many others. But if it worked once, why not try again?
After the Qwikster disaster of 2011, Netflix could have decided that they were never going to touch pricing again. They did, in fact, leave pricing alone until 2014. But over time, Netflix collected evidence that they had an opportunity to revisit pricing in a more thoughtful way. When they were ready to do so in 2014, Netflix took a conservative approach to mitigate the risk of another backlash. The success of their 2014 pricing change gave Netflix the confidence to take a more aggressive approach the next time around and then an even more aggressive approach in 2019.
Jonathan Friedland, the new vice president of global corporate communications who had joined Netflix just a few months earlier, asked whether customers on tight incomes might object to the price hike, according to people at Hastings' meeting. Hastings argued that Netflix was a great bargain. He said he knew that some customers would complain but that the number would be small and the anger would quickly fade.
Hastings was wrong. The price hike and the later, aborted attempt to spin off the company's DVD operations enraged Netflix customers. The company lost 800,000 subscribers, its stock price dropped 77 percent in four months, and management's reputation was battered. Hastings went from Fortune magazine's Businessperson of the Year to the target of Saturday Night Live satire.
To Hastings' credit, what he wanted to do made sense. The DVD's best days are behind it. Video streamed via the Internet is slowly replacing the physical disc, and betting a business on a dying product is never a great idea. So Hastings wanted to get ahead of the curve and focus on streaming, to disrupt his own business before someone else did it for him. It was aggressive, far-sighted, and very much in character.
Hastings is someone who knows a thing or two about disrupting businesses. Netflix, after all, is the company that drove the giants of video rental out of the sector with a simple premise: A simple-to-use Web site that delivers DVDs right to your doorstep. Best of all: No late fees. He became one of those executives with the "visionary" label, who can predict where a market is going before it happens, and was asked to join the board of directors of two of the most important companies in tech, Microsoft and Facebook.
Leading up to the first anniversary of the Netflix meltdown, CNET interviewed former and current Netflix employees to find out how a series of missteps turned into a lost year, and whether it has rebounded from those self-inflicted wounds. Most asked to remain anonymous. Netflix declined to comment for this story.
90f70e40cf