Netflix rolled out its cheaper, ad-supported ‘Standard with ads’ tier roughly five months ago. Now the streaming giant is making some significant changes that will improve the value of the plan.
As spotted by The Verge, Netflix laid out the changes in its Q1 2023 letter to investors. The streamer will bump video quality on the ad tier from 720p to 1080p. Moreover, it will let subscribers watch two streams at once. The letter notes the changes will go into effect in Canada and Spain immediately and will eventually come to all 12 markets where it offers the ad tier later this month.
The Netflix website already lists the video quality change to Standard with ads tier on the plan comparison page. Interestingly, this makes Standard with ads a significantly better option than Netflix’s $9.99 ‘Basic’ tier that still locks content to 720p. Basic does offer some features that Standard with ads doesn’t, like the ability to download content to watch offline.
Along with the changes to Standard with ads, Netflix said it was “pleased” with the performance of its “per-member advertising economics” and notes that engagement on the ads tier is “above our initial expectations.”
So far, Netflix says it hasn’t seen many people switching from Standard or Premium to ad plans. Moreover, the company says Standard with ads now has, on average, roughly 95 percent content parity globally with ads-free plans. Netflix says its ads plan already has a total average revenue per membership (ARM) — from subscriptions and ads combined — that’s “greater than our standard plan,” which is part of why it’s increasing the video quality.
During the Q1 2023 earnings results, Netflix also said it was “pleased with the results” of paid sharing in Canada and other markets and will expand the program to the U.S. in June. Read more about that here.