Netflix claims that it is still in the early stages of developing its ad-supported subscription plan, but rumors suggest otherwise. As with any leak, the unofficial details may change or be proven completely false by the time the tier goes live, but it appears that the video streaming giant already has the majority of the pieces in place. The main exception is that the company may still be negotiating with studios and content providers to ensure that its ad-supported plan has the best catalog possible when it launches. According to a new report, the more affordable tier is a mixed bag, and the details — if true — may cause consumers to seriously consider whether the pros outweigh the cons.
In some ways, it appears that Netflix is desperate to gain new subscribers — or, at the very least, regain lost ones. Although the company is not yet in trouble, subscriber decline is no laughing matter in its competitive industry. Netflix is blaming rampant account sharing with people other than family members for its problems, and it has begun to crack down on what it considers unauthorized behavior. That is unlikely to restore its subscriber numbers, so the company will offer a more affordable subscription tier. Such affordability — if it is truly affordable — will come at a cost, the most obvious of which is that users will have to tolerate seeing advertisements.
Netflix ad-supported strategy
According to Bloomberg, the price of Netflix’s ad-supported tier could range between $7 and $9 per month. The streaming service already offers a $9.99 monthly subscription, but it is limited to 480p video quality. In comparison, the platform’s standard and most popular tier costs $15.49 per month and includes high-definition streaming for up to two devices.
Depending on the final price Netflix chooses, this ad-supported tier could be viewed as either a significant savings or a deal-breaker. The report does not specify whether the streaming quality for this tier will be 480p or HD, which could be a deciding factor in the success of the new subscription. Another potential issue is that the new plan may not include Netflix’s entire catalog, and which shows and movies are included will be determined by the company’s ability to strike favorable deals with its partners. Of course, Netflix’s original content will almost certainly be available in its entirety. If the company wants to entice ad-supported subscribers to upgrade to a higher tier, it will undoubtedly have to hold back on some juicy titles.
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The length of the advertisements could work in Netflix’s favor. According to the report, Netflix intends to show four minutes of advertising for every hour of streaming, which is significantly less than most other ad-supported streaming services. According to the report, the ads will be shown before the start of a video and every hour thereafter, but no ads will be shown after the video ends. It is still unknown whether they will be skippable. According to a previous report, Netflix will not show ads on kids’ shows or new original movies, though this will only be true for a limited time after the content is released on the service.