Netflix to launch cheaper ad-supported subscription tier in November | Netflix

Netflix will reportedly launch a cheaper, ad-supported tier for its streaming platform in early November as the company tries to halt the loss of more than 1 million subscribers in 2022.

The company initially planned to start offering the service in 2023, but Variety reported last week that it had moved up to November 1 to get ahead of Disney+’s planned one-tier, ad-supported launch in December.

The Netflix service will reportedly launch in the US, France, Germany, Australia, and Canada, among other places, and is expected to be priced between $7 and $9. The most basic Netflix subscription now costs US$9.99 or $15.49 for a standard subscription.

The ad tier would be in addition to existing tiers, meaning current subscribers would not see any ads on Netflix.

A Netflix spokesperson said the company had not yet made a decision.

“We are still in the early days of deciding how to launch a lower-priced ad-supported option and no decisions have been made,” they said. “So this is all just speculation at this point.”

In July, Netflix reported a loss of 1 million subscribers for the second quarter of 2022, its second quarter of subscriber loss, with the stock down 67% through the end of July.

At the investor call in July, the company’s chief operating and product officer, Greg Peters, revealed the company’s thinking behind the introduction of advertising to support lower-rate subscriptions.

He said Netflix wants to “provide an amazing experience for consumers … who choose to accept the ad-supported offer, but also provide an amazing experience for brands and advertisers who want to work with us to make sure we’re doing a good job.” . to elevate what that means to them.”

He said he was optimistic that advertising on Netflix can “deliver an experience that is fundamentally different from the advertising experience” on broadcast or cable television today.

The launch would focus on countries where there were “more mature ad markets,” Peters said at the time.

Netflix announced in July that it would partner with Microsoft for ad technology and as a global sales partner. Variety’s report suggested that the two companies are looking at a cost of US$65 per thousand views, seeking a minimum annual ad spend commitment of US$10 million from the companies now, and touting that the company can get 500,000 subscribers on the level with advertising by the end of 2022. .

Peters told investors in July that there was “a lot of excitement” in early talks with ad agencies.

“I think for them… they wanted to connect with titles, incredible content that [Netflix chief executive, Ted Sandros’s] the team was putting out there,” he said. “And I think we also share a perspective on what a great experience is for consumers and advertisers.

“So when you think about the type of advertising we see, the frequency caps, what is a great ad experience, we see a high degree of alignment there.

“So, that excitement, that lineup is adding to my optimism and excitement that I basically have to get this out there because I think it’s going to be a win-win for all parties involved.”

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