Can Netflix continue to chill if it starts showing ads?
Netflix is making some major changes to its business model, experimenting with promoting trailers for other Netflix content between series, as well as subscription methods. Is Netflix ensuring its longevity or taking its user base for granted?
Netflix currently monetises its app through in-app subscriptions which flow through the app stores. The app is free to download, but a user must sign-up to a monthly subscription to access content. Its move to disable billing through the Apple App Store means users will be redirected to a mobile web version of the app to set up payment. It might seem like a logical step for a business that dominates the streaming industry.
Netflix has seen phenomenal success having its subscriptions route through the app stores historically. Avoiding the 30% and 15% app store cut, allows Netflix to get 100% of the revenue from in-app subscriptions. However, evaluating lost revenue from customers who don’t subscribe due to the additional hurdles, is what remains to be determined.
It’s not just good content that keeps Netflix in the number one spot, it’s an understanding of user behaviour, diminishing pain points and maintaining users’ attention. Netflix excels at understanding people’s habits – from the types of shows they like to watch, to what might peak their interest from the range of upcoming new content. It’s built a brand on making life as easy as possible for its users. Whether it’s autoplaying the next episode in a series or curating the best tailored content for each profile in the account, Netflix knows how to keep you sucked in and glued to the screen.
Read the full article at The Drum