On August 31st, Netflix announced that it would be offering certain Netflix original movies and TV shows for free. You may be thinking “Ok but you have always had a trial period before your subscription takes effect. The reason why this is innovative is because it bypasses the hurdle of asking for a potential customer’s credit card.
Potential customers can bounce from the billing information page for several reasons. Some consumers are afraid of sharing their credit card information. Others feel like they might forget to cancel the service if they are not convinced by the service. Still others may feel like opting out later may simply feel like opting out of a free trial is simply too much hassle. According to optinmonster, “When you don’t ask for credit card info, the rate of visitors signing up for free trials rises from 2% to 10%.” Nonetheless, not requiring billing information leads to other drawbacks such as a decrease in trial to paid conversions.
Netflix attempts to bypass this potential decrease in conversions by enticing consumers to sign up in order to see episodes past the first free one available on the website.
Another potential issue with this marketing approach is potentially the fact that Netflix cannot associate a specific interaction with a user as they are not signed in. This may lead to a lack of aggregated data, which may prevent Netflix from analyzing what went well and what could be improved.
Do you think that this approach will be successful in increasing the number of subscribers or is it simply offering free content to users who never plan to become customers?