Netflix could price its new ad-supported subscription at $7 to $9 a month. This figure represents half of its currently most popular plan (which is priced at $15.49) and is intended to strike a balance for users as well as offering a satisfying experience.
The report comes from Bloomberg, a medium that has already given other details regarding how advertising will work on the streaming platform. Among the new information is the fact that Netflix plans to sell about four minutes of commercials per hour on this model.
The amount of advertising during each hour is significantly lower than the standard for traditional television, which is between 10 and 20 minutes per hour. Also, some streaming services that already have ad-based models, like Hulu, have been criticized for showing the same ad over and over again.
It was also highlighted that the advertisements will be shown before and during the programs, but not after in order not to overwhelm the viewers with the advertisements and prevent them from leaving the platform.
This new plan is expected to be available from the last quarter of the year in at least half a dozen markets worldwide, while the full launch would be delayed until early 2023; however, the details of the service are still under development, so features are subject to change.
For a long time, Netflix was reluctant to incorporate ads as part of its strategy to attract more audiences, but the loss of users (which in the second quarter of the year had already added more than 1 million) is forcing the company to adopt a new model of business.
“Those who have followed the Netflix trajectory know that I have been against the complexity of ads and a big fan of the simplicity of subscription,” said the company’s co-CEO, Red Hastings. “But as much as I’m a fan of that, I’m more for consumer choice.”
According to data from media market analytics firm Ampere Analytics, Netflix’s new level of advertising could generate $8.5 billion a year globally by 2027, thanks to subscription fees, but also for the sale of advertisements.
Although there is no official confirmation from the company, so far some of the details of the new subscription level have been released, such as the fact that downloadable content will not be available to users who opt for this service.
It is also known that not all the content will be available, but the company is working to create new commercial agreements with different production companies to allow it to place ads and make them accessible to users.
Likewise, the company will not show commercials in children’s programming and will not allow them in original films, at least during the premiere periods, which are the most popular for its content.
