Netflix sunsets its DVD service
Netflix announced Q1 earnings report this week, saying it added 1.75 million subscribers in Q1, down significantly from the 7.66 million added in the previous quarter. Q4 2022 was when they launched their ad-supported tier, so that helped drive more subscriber growth. Now, Netflix says its $6.99/month Basic With Ads tier brings in more revenue than the Standard (ad-free) Plan. The company also announced it will be ending its DVD-by-mail business after 25 years and more than 5.2 billion DVDs shipped.
The Circana Take:
- While the DVD business was how Netflix began, many people have since forgotten about the red envelopes that would come every week with a new movie to watch. While the business was still making money for Netflix, its decision to end the service comes as streaming becomes more relevant and DVDs become more obsolete.
- While Netflix may be focusing 100% on streaming, DVDs continue to generate well over $1 billion in sales for the industry each year, with collectable sets growing 85% year-over-year. Will we be seeing DVD Day in addition to Record Store Day soon?
AMC+ is getting an ad-tier
Streaming costs are continuing to rise for consumers, and with so many options today, they may be more selective when choosing which service to subscribe to. One way that streaming companies are mitigating this is by introducing less expensive ad-supported tiers for their subscribers. AMC Networks is the next streamer to do so: the company is planning to launch an ad-supported tier of their AMC+ platform later this year. Pricing has not yet been announced. AMC+ has content from AMC, BBC, and targeted streamers like Shudder and SundanceNow.
The Circana Take
- AMC+’s ad-tier will allow the company to reach more consumers that may be interested in the content on the platform but aren’t willing to pay for yet another streaming service.
- Plan tiering is also a churn mitigation tool, allowing less frequent viewers to stay engaged at a more affordable price.