According to a new report, Netflix is moving ahead with its plan to introduce a cheaper ad-supported tier to its service. The company intends to launch the plan by November to compete as Disney+ has already announced that its own ad-supported tier will become available in December.
Netflix wants to charge advertisers for its ad-supported tier $65 for reaching 1,000 viewers
In May, it was reported that Netflix lost 200,000 subscribers in the first quarter of 2022, causing it to lose 2% of its market share. At the same time, its competitors including Apple TV+, Disney+, Hulu, etc, continued to see growth.
In June, the WSJ revealed that the company plans to launch a lower-priced ad-supported tier for users so that it can further monetize the platform. The move is meant to attract new users while also generating revenue from ads.
Now, WSJ and Variety are reporting that Netflix is readying its cheaper ad-supported tier to ensure it can be released before the launch of the Disney+ tier. In July, investors of Netflix were told that the company would launch the new tier in the first few months of 2023. However, it is now set to launch on November 1 in the United States, Canada, United Kingdom, France, Germany, and more.
As for the pricing of the ads, the company is looking to charge $65 for reaching 1,000 viewers, which is higher than other streaming platforms are charging. However, the number is up for negotiation.
Initially, Netflix plans to sell 15- and 30-second ads that would appear before and during some programs, ad buyers said. The company is looking to keep the ad load to four minutes of ads for every hour of programming—less than some of the other streaming services and much less than traditional TV, the ad buyers said. Ad loads on traditional TV are usually between 18 minutes and 23 minutes an hour, according to Kantar, a research firm.
The ad-supported tier is reportedly going to cost $7-8/per month and viewers will be shown four minutes of ads per hour, as mentioned above.