Netflix adds new ad-supported subscription

Netflix will launch ad-supported subscription plan to gain from ad revenue

Netflix, for over a decade, has led the streaming world and ruled with original content and higher subscribers. It has however tasted the down phase it’s undergoing since the start of this year. To change the game, Netflix, according to a report from Bloomberg news, plans to charge between $7 and $9 a month for its new advertising-supported subscription plan.

This is a changed stance from Netflix CEO Reed Hastings. Netflix has always kept its subscription ad-free. Whenever asked about an ad subscription, Hastings had always maintained that because there were no commercials, Netflix provided a better service.

Netflix Game Change

However, the move to change from an ad-free to an ad-supported subscription was to draw customers who are ready to view some advertisements with a lower monthly fee. Reed Hastings has always focused on customer experience. So the streaming platform is watchful about appealing to cost-conscious customers.

Netflix predicted an addition of 2 million subscribers in the first quarter of 2022. The prediction never came true, as the reality was just the contrary. As a result, its stocks have collapsed, coming down to 25 percent.

Hastings told investors in April that he planned to launch a cheaper service with ads “over the coming year or two,” but he was vague about the specifics after disclosing that his company had lost customers for the first time in a decade. “I’m confident we’ll just work it out”, he said.

New moves with smaller deals

Netflix’s plans include spacing four minutes of ads hourly. The timings of the advertisements would be before and during some videos, though not after. According to some insiders, in order to avoid over promising and overwhelming viewers with advertisements, it is also informing advertisers it prefers to make smaller deals upfront. The new plan is half the price of its current, most well-liked plan, which costs $15.49 per month without advertisements.


The new plan is half the price of its current, which costs $15.49 per month without advertisements

Netflix plans to launch its new, cheaper alternative in at least a half-dozen locations during the final three months of the year. According to the firm, the entire deployment may need to wait until the start of the following year. Information about the service has surfaced as Netflix makes its preparations and engages with business partners. A lot could change as the company grows.

For years, Netflix has promoted itself as a flexible substitute for cable TV. Without advertising, people could watch movies and TV broadcasts whenever they wanted. They get easy access to an enormous selection of programmes and can cancel (or join up) at any moment. However, the first part of this year’s subscriber losses compelled management to eventually embrace advertising. They think the less-priced tier will both draw in new users who are concerned about prices and provide those who are prepared to cancel with a less expensive option. Including subscription fees and ad revenues, the new tier may bring in $8.5 billion annually for Netflix globally by 2027, according to media consulting firm Ampere Analytics.

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