It has been an eventful last couple quarters for Netflix, rolling out a new low-cost ad-supported plan in November, followed by new password-sharing crackdowns in four countries in February. The streaming giant captured headlines once again Sunday, having to scrap a live reunion show for its hit reality show “Love is Blind” due to technical issues.

Where does this leave Netflix today as Q2 2023 begins? The video streaming giant missed the mark on subscriber estimates in Q1 2023 while also announcing that a broad rollout on its paid password sharing plan originally slated for Q1 is now coming in Q2.

What can Netflix expect in the weeks and months ahead in light of this news? Here are four key consumer insights surrounding Netflix: 

1. Netflix’s “Basic with Ads” is on the ups, as intent holds steady.

While Netflix fell short on subscriber growth expectations, its “Basic with Ads” subscription plan appears to be on the rise. The latest CivicScience data among those aware of the plan show users of Netflix’s ads-supported plan increased by six percentage points to 24% since the initial days following its launch in November. The percentage of those who tried the plan and canceled it is up by one percentage point, but 1-in-10 still plan to give it a try. After lagging a bit in its early weeks, subscriptions for the ad-supported plan have reportedly surpassed the 1 million mark.

Gen Z adults aged 18-24 (56%) and Millennials aged 25-34 (43%), appear the most inclined to use Netflix’s ad-supported plan, whereas those aged 55 and older show much lower adoption at only 9%.

The lower-cost ads plan is also garnering adoption among subscribers of Netflix competitors. Half of Hulu + Live TV and 47% of ESPN+ subscribers are also subscribing to the ad-supported Netflix plan. In contrast, Amazon Prime Video, which does not have ads like Hulu or ESPN+, shows 30% of its users also using the ad-supported Netflix subscription, with 55% showing no interest.

2. Password-sharing crackdowns likely to bring turbulent times for Netflix.

Netflix is aware this move will be unpopular once it begins in the American market, but how much of an impact will it have? CivicScience data among Netflix users show a whopping 70% feel it’s at least ‘somewhat likely’ they would cancel their subscription to a streaming service that began charging extra for account sharing outside of the home.  

3. Amid churn concern, can Netflix win its intenders?

Just how common is stream churning, or signing up for a subscription to watch a specific show and then canceling/pausing the subscription after watching it? CivicScience data show the practice is down slightly (one point) from August to 48% among streamers. Twenty-six percent say they’ve done this practice at least once. A further 13% report doing it 3-4 times, while 9% have done it on five or more occasions.

Much like the general population of streamers, 48% of Netflix users report having churned through a streaming subscription at least once. Twenty-nine percent report doing so between 1-2 times, three percentage points higher than the Gen Pop. That said, the streaming service may want to take note – 64% of Netflix intenders are churners, with a plurality (43%) saying they’ve done it five or more times. 

4. How can Netflix stand out? Content may truly be king.

The high churn rates within the streaming industry raise questions on how platforms like Netflix can attract and retain subscribers. Just what exactly are streamers looking for out of their subscriptions? According to new CivicScience data, the top factors streamers consider when choosing a streaming subscription are ‘price’ first (31%), followed by ‘content variety’ (29%) and ‘selection of popular TV shows and movies’ (20%).

Examining that data among Netflix users:

  • Thirty-two percent prioritize ‘content variety’ as their most significant factor, surpassing ‘price’ by seven percentage points (25%). ‘Selection of popular TV shows and movies’ rounds out the top 3 (23%).
  • However, Netflix intenders are more concerned with price (35%), then focus on content-related factors, such as ‘content variety’ (31%) and ‘original content’ (16%).
  • Non-users show the highest reliance on price at 37% followed by ‘Selection of popular TV shows and movies’ (21%). 

Whenever it arrives, the password sharing rollback is likely to contribute to the rough seas Netflix is encountering amid a busy streaming market. Will it be able to balance out the potential losses with advertising revenue from its ad-supported model? Only time will tell. 

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