Netflix with Ads Pricing Said to Start from $7/month, Says Report
Netflix is targeting a price point between $7-9 USD a month for the cheaper, ad-supported subscription tier it plans to launch sometime this year — reports Bloomberg.
If true, the new plan would clock in at almost half the price of Netflix’s current most-popular plan, which costs $15.49 USD per month.
According to people familiar with Netflix’s plans, the streaming platform will serve about four minutes of advertisements per hour of content to subscribers of its ad-supported service. Netflix is undercutting the industry standard for commercials to strike a careful balance between profitability and consumer appeal.
Netflix will only show advertisements before and during some programs, but never after, sources said. Insiders also indicated that Netflix is starting out with smaller advertisement deals so as to not overwhelm subscribers with ad spots.
Reports indicate that Netflix will debut its first ad-supported subscription plan during the last quarter of this year in at least half a dozen markets. Netflix has said that rolling the new tier out to all markets may take until early next year.
The streamer has been bleeding subscribers, and it wants to appeal to a wider target audience consisting of those who find the standard Netflix subscription too costly but don’t mind watching some ads in exchange for a haircut on the monthly rate.
Netflix has historically been against advertising. However, heavy subscriber losses in recent quarters have led to the executive leadership’s about-turn on the issue. The company announced plans for an ad-supported tier earlier this year, and it chose Microsoft as its advertising partner in July.
To make the ad experience more comfortable for users, Netflix plans to avoid using too much targeting to tailor ads to the viewer and ensure that the service doesn’t serve the same ad spots to users over and over again.
Unfortunately, Netflix’s new subscription will come with some additional drawbacks beyond just ads. Netflix has so far confirmed that its ad-supported tier will lack some licensed shows and won’t allow offline downloads.
Netflix starts at $9.99 CAD/month in Canada for the basic plan, while the standard plan costs $16.49 CAD/month and the premium tier costs $20.99 CAD/month.