Nearly 20% of all Netflix's US subscribers have signed-up for its less costly subscription.
👉 Background: Netflix launched its ad-supported tier in November last year to.. not a huge amount of fanfare.
👉 What happened: Now, nearly 20% of all new U.S. subscribers have signed-up for the less costly subscription - but still behind Disney+.
👉 What else: The biggest fear for Netflix and its investors was that its ad supported customers would cannibalise its existing offering.
💡 Market cannibalisation happens when a company introduces a new product or pricing structure that displaces one of its existing products.
💡Experts were concerned that this new Netflix tier would cause many existing customers to downgrade… meaning less revenue for the Flux.
In November last year, which was launch month, 43% of their first ad-supported customers were downgraders from the premium plan.
💡But since then, most subscribers to Netflix's ad-supported tier are new users or lapsed users. So, the risk of cannibalising its existing pricing structure looks to have been saved!
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