Bottom line: Netflix’s recent troubles have forced it to become more like its competitors by announcing an ad-supported tier. Newly leaked data suggests ad-based subscriptions will lose the ability to download content for offline viewing. This restriction also falls in line with its competitors.
On Wednesday, tech blogger Steve Moser said he found code in the Netflix iPhone app indicating its upcoming cheaper ad-supported tier won’t have offline viewing. The code consists of text flatly stating “Downloads available on all plans except Netflix with ads.” It also mentions an initial setup experience asking new subscribers to input details to help tailor ads.
Hulu and HBO Max only allow subscribers of higher tiers to download videos locally. So it’s not surprising Netflix would follow suit. Downloads are useful when viewers don’t have consistent internet access, like while traveling, for example. It does make sense to restrict downloads on the new ad-based subscription since delivering tailored ads to offline users is challenging.
After months of rumors, Netflix confirmed plans to offer cheaper subscriptions in turn for running ads in April. Initially, the company denied intentions to do so. It partnered with Microsoft to help deliver the ads.
Last month, Netflix executives revealed another disadvantage of the ad tier — it won’t include all of the service’s content. Subscribers will likely be able to watch any Netflix Original show or movie like Stranger Things or The Gray Man, but licensing challenges make this harder for everything else. Disney, in contrast, owns all of its content, so its ad-supported subscription doesn’t have this problem.
Showing ads is Netflix’s primary response to losing millions of subscribers over the last few months. The company’s stock price plunged 75 percent in April but has recovered slightly since July.
In addition to the cheaper subscription, Netflix is trying to shore up revenue by cracking down on password sharing, which it partially blamed for this year’s subscriber losses. Last month, as an experiment, it started asking users in Latin American countries to pay extra after detecting new logins outside their usual IP addresses.
Netflix also launched a selection of mobile games available to subscribers. Unfortunately, less than one percent of Netflix users have downloaded any of the offerings. It’s unclear if the ad-supported tier will include access to the games. Nonetheless, this may be the beginning of the company’s gaming plans. Recent job listings suggest Netflix wants to move into cloud gaming, which could help its games spread to hardware beyond mobile devices.