Netflix to launch a cheaper, ad-supported subscription plan in November
Netflix will reportedly launch its cheaper, ad-supported plan, the company's solution to its plunging customer base, on November 1. As per Variety, the streaming giant's decision to go live with the new plan in November has a lot to do with Disney+'s upcoming ad-supported tier in December. Originally, Netflix was planning to introduce the service in 2023.
Why does this story matter?
- Netflix's 2022 has been quite poor by the company's lofty standards. In its Q2 earnings report, the streaming giant reported a loss of one million subscribers.
- With growing competition in the streaming space, Netflix has decided to launch an ad-supported tier. Yes, the same notion once Netflix stood against.
- However, times have changed now and the company is in dire need of revitalization.
The ad-supported tier could cost between $7 and $9
Netflix's ad-supported plan will go live on November 1 in multiple countries, including the US, UK, France, and Germany, according to industry sources. It will reportedly cost $7-9 per month. In contrast, the current basic plan costs $9.99. The cheaper plan may not allow users to download videos or watch offline.
Netflix seeks to charge ad buyers a steep $65 CPM
Netflix is launching the ad-supported tier in partnership with Microsoft. The ads are expected to be non-skippable. The company is seeking to charge ad buyers $65 CPM or cost per thousand, which is a lot higher than the industry standard. Initially, advertisers will have limited targeting ability. The annual spending of every brand could be capped at $20 million.
Series will have 4 ads/hour, while movies will run pre-ads
Netflix's ad-supported tier will reportedly have an ad load of four ads/hour for series. Movies, on the other hand, will run pre-roll ads. There will be frequency caps (how many times an ad appears to the same person) of one/hour and three/day. In the first phase, ads won't be shown on the basis of geography, age, gender, viewing behavior, or time.
We are still in the early days: Netflix
Netflix is still being cagey about the ad-supported tier's launch date. A company representative said, "We are still in the early days of deciding how to launch a lower-priced, ad-supported tier and no decisions have been made."
Netflix could ban crypto-related commmercials
Netflix may reportedly ban crypto-related commercials from its upcoming ad-supported tier. The streaming giant is hesitant to expose its over 200 million global subscribers to the financial risks of cryptocurrency, considering that the ads will be unskippable. It is also mulling whether to restrict pharmaceutical ads or not. Ads related to politics and gambling may also not get Netflix's nod.