Could A Price Hike Be Coming To Netflix Ad Tier? Co-CEO Greg Peters Doesn’t Rule It Out, But Says Execs “Love” Being “Lower”

deadline.com:

Netflix‘s 18-month-old advertising subscription tier could well see its price ($7 a month in the U.S.) rise in the not-too-distant future, but Co-CEO Greg Peters says execs “love” the strategic advantages of the current level. “In terms of raising that price, we think about it similar to pricing in general,” he said on the company’s second-quarter earnings call when asked whether the company might consider a rate hike. “We love having an entry price that’s lower.

That means we are more accessible to more people in our ads markets. That’s a great thing because they can have access to all of the great storytelling we are doing there.” In its quarterly numbers, Netflix posted a better-than-expected increase of 8 million total subscribers over the prior quarter, reaching almost 278 million globally.

In its letter to shareholders, the company said its ad tier grew 34% over the first quarter and now accounts for 45% of all subscriptions in the territories where it is available.

The company does not formally break out numbers by subscription tier, but said in May that it had reached 40 million monthly active users, up from 23 million in January. (MAUs is a common metric in ad-supported streaming.) “It’s our job to increase the value to all of our members,” Peters explained. “When we have signals from our members – the amount of acquisitions that we’ve got going on, engagement, what our retention and churn looks like – then we find the right moment to ask our members to pay a little bit more to help us keep that flywheel spinning.