Topline
Netflix will launch its cheaper, ad-supported tier on November 3, the company announced Thursday, after facing steep competition from other streaming services and suffering a loss of subscribers for the first time in 10 years.
Person holds an Apple TV remote using the new Netflix app with a hand.
Key Facts
The new subscription tier will cost $6.99, compared to $9.99 for its current cheapest plan.
At the time of launch, ads will be 15 or 30 seconds in length, and will air at the start of and during programs, Netflix said, and will average roughly 4 to 5 minutes per hour.
A limited number of shows and movies will not be available with the ad-supported tier because of licensing issues, Netflix said, and users of this tier won’t have the ability to download programs to watch offline.
The Basic with Ads tier will be available in the U.S., the U.K., Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, and Spain.
Big Number
220.67 million. That’s how many paid subscribers Netflix reported having as of July. The streaming service said that over 100 million households are watching Netflix but not paying for it because of password sharing, and is “in the early stages of working to monetize” those users.
Key Background
In its first quarter earnings report, Netflix said it lost subscribers for the first time in a decade, dropping by 200,000 accounts, causing the company’s share price to tank. In response, co-CEO Reed Hasting said the company would explore launching an ad-supported tier. The company formally announced plans to launch this service in July, saying it chose Microsoft as its advertising technology and sales partner. In its second quarter earnings report, Netflix said it expected the new pricing tier to launch in early 2023. Netflix isn’t the only streaming service trying to attract new users with cheaper costs. Disney+ announced in August it would also launch a less-expensive, ad-supported tier on December 8. Disney’s service will cost $7.99 a month, slightly more expensive than Netflix’s. When Warner Bros. Discovery announced in August that Discovery+ and HBO Max would be merged into a singular streaming service next summer, it said that its ad-supported version would be free. Hulu is one of the few streaming services that has long offered ads on its platform.
Further Reading
HBO Max And Discovery+ Will Combine Into One Streaming Service (Forbes)
Disney+ Launching Cheaper Ad-Supported Tier In December (Forbes)
Netflix Shares Jump Over 6% After It Reports Smaller Subscriber Loss Than Forecast (Forbes)
Netflix Loses Subscribers For The First Time In Ten Years, Shares Plunge 35% (Forbes)
Source: https://www.forbes.com/sites/marisadellatto/2022/10/13/netflixs-cheaper-ad-supported-tier-launching-november-3/