Netflix planning on ad-supported plan with $7-$9 price tag

The streaming giant is currently considering a $7-$9 price tag for its ad-supported tier.

Netflix plans to put a $7-$9 price tag on its next ad-supported plan, a news outlet revealed on Friday. The streaming giant is looking to introduce its budget and ad-supported tier towards the end of the year in six geographies, with a wider rollout later next year.

According Bloomberg, the goal of Netflix’s new ad-supported plan is to gain more subscribers who are willing to pay a lower price in exchange for watching certain ads. Because this is the first time the tech giant has introduced ads to its streaming service, it’s trying to strike a balance between providing a more cost-effective market while providing a great viewing experience.

How many ads will be in Netflix’s ad-supported plan?

Those familiar with Netflix’s ad-supported plan said the company plans to add four minutes of commercials per hour of content, which would be less than most of its competitors. Netflix will also show ads before and during certain programs, but not after.

Netflix’s next ad-supported plan with an expected price of $7-$9 is aimed at more cost-conscious consumers, as the streaming giant’s current offerings are priced at $9.99, $15.49, and $19. $.99 per month. The decision to roll out a cheaper, ad-supported plan comes after Netflix announced it had lost subscribers for the first time in over a decade. The edge reported.

In April, Netflix co-CEO Reed Hastings said the company was ready to embrace a cheaper, ad-supported plan despite years of rejecting the idea from ads. Co-CEO Ted Sarandos said in June that they were already working on the ad-supported plan, and in July Netflix confirmed its association with Microsoft, which will serve as technology partner for serving ads.

“Those who have followed Netflix know that I have been against the complexity of advertising and a big fan of the simplicity of subscription,” Hastings said in April, according to Reuters. “But as much as I’m a fan of that, I’m a bigger fan of consumer choice.”

Read also : Netflix charges extra for password sharing beyond the home

What to expect from Netflix’s ad-supported plan

Netflix’s next ad-supported plan will unsurprisingly feature a number of downgrades from its current plans that don’t contain ads. Netflix executives have confirmed that some content will not be available on its ad-supported plan at launch. Additionally, code found on Netflix’s mobile app showed that the streaming service might not allow users of the ad-supported plan to download shows to watch offline.

Forbes reported this week that Netflix shares fell 6%, adding to continued losses this year. Netflix’s stock has now become one of the worst performing stocks in the S&P 500, with analysts predicting it will continue to underperform for the rest of the year. Netflix’s ad-supported plan is expected to earn Netflix $8.5 billion a year by 2027, media consultancy Ampere Analytics has predicted.

Related article: Netflix vs. password sharing: New plan charges extra homes in Latin America

Eleanor C. William