30% of U.S. Netflix subscribers in Premium service tier

30% of Netflix Subscribers in Premium Service Tier

New Parks Associates OTT video research reports that 30% of Netflix subscribers are in the premium service tier, up from the 21% in late 2017. At the same time, uptake of Netflix’s basic tier has fallen from 35% of subscribers in late 2017 to 27% in early 2018. These shifts come despite Netflix’s price increase to its premium tier in October 2017.

“This shift reflects trends that we are seeing across the industry, beyond Netflix,” said Brett Sappington, Senior Director of Research, Parks Associates. “Netflix’s basic tier is limited to one screen and SD quality, while the premium tier offers viewing on up to four screens and access to Ultra HD content. Many OTT-subscribing households have multiple people who want to watch similar content at the same time. Rather than competing for access, consumers are willing to pay extra for the convenience of multiple streams. At the same time, consumers want to watch on TVs, making HD viewing a must. Demand for Ultra HD TV is small but increasing.”

“The landscape for digital entertainment has changed rapidly with the emergence of OTT services and the pressure on traditional players to respond,” Sappington said. “Future of Video will examine changes to the service provider business model and dig deep into changing consumer habits for insights into the best strategies to build new services for today’s video consumer.”