We know Netflix will launch an ad-supported cheaper tier, but we don’t know how much cheaper it will be. A new report suggests that Netflix executives are currently considering a price point of $7 to $9.
This is according to sources I spoke to Bloomberg (opens in new tab), and believe the streaming service will insert about four minutes of commercials into each hour of programming on that particular tier. Netflix will obviously show ads before and during the show, but not after the show.
The $7-$9 price range is slightly lower than the $9.99 tier that Netflix currently offers, but that will only get you standard-definition streaming quality. HD streaming costs $15.99, so the new tier is about half that price. The 4K plan costs $19.99 per month.
no repetition
We’re assuming Netflix will price the new ad-supported service in a similar fashion internationally, so it’s slightly lower than the current most affordable tier: £6.99 a month in the UK and AU$10.99 a month in Australia.
According to Bloomberg, Netflix with ad options will launch in select markets sometime in October, November or December. As previously announced, Microsoft is handling ad sales for Netflix.
The report also said Netflix is keen to avoid delaying viewers by ensuring ads aren’t repeated and targeted too precisely. In other words, most people will see the same ads between shows.
Analysis: Netflix’s next big bet
Netflix will be hoping its new plan is a big hit as it grapples with declining subscriber numbers and increased competition from the many other streaming services that have popped up in recent years. It will earn revenue from subscription fees and ad slots sold.
According to Bloomberg, Netflix executives aim to attract new price-conscious customers and give people preparing to cancel Netflix another option to consider before they stop paying.
However, having to watch ads may not be the only downside of the new plan: Code hidden in the Netflix app suggests that subscribers on the ad-supported tier won’t be able to download shows and movies to their devices to watch offline.
We’ll have to wait and see if that turns out, but there may be other things to consider when determining whether a Netflix subscription makes sense for you — and which tier offers the best value for money you want to watch.
