The time has finally come: After teasing its ad-supported plan earlier this year, Netflix is apparently considering charging users somewhere in the ballpark of $US7 (converted to around $AU10) to $US9 (around $AU12) for the tier.
Gone are the days of Netflix’s exponential (and seemingly infinite) growth. The company, once a Goliath in the streaming industry, has hit some snags in the past few months with password sharing and ad-supported subscriptions posed as potential solutions to course correct after subscribers began to jump ship. While an ad-supported tier on Netflix has been rumoured for a few months, Bloomberg reports that the company is getting ready to pull the trigger sooner rather than later by introducing an ad-supported subscription plan that could cost users around $US7 (around $AU10) to $US9 (around $AU12) a month. Currently, Netflix offers three ad-free tiers. Standard monthly membership is $AU16.99, the Basic plan goes for $AU10.99 and a Premium subscription is $AU22.99.
Netflix did not immediately return our request for comment.
Netflix is in a previously uncharted place, as the service has never included ads in its programming, and Bloomberg says that the company is looking to cater to cost-conscious consumers while still trying to provide a pleasant viewing experience. Sources told Bloomberg that this ad-supported tier will feature four minutes of commercials per hour (I can’t wait for eight minutes of commercials during the next Stranger Things finale). Also, the company is expected to run ads before and during programs, but not after. A timeline for the rollout is unclear, but Bloomberg says that the tier will first be released in “at least a half dozen” markets in the last three months of 2022 with a larger release in 2023.
Netflix previously announced it was tapping Microsoft to help develop the ad campaign that will run on this new subscription plan. Netflix Chief of Operations Greg Peters wrote back in July that “Microsoft offered the flexibility to innovate over time on both the technology and sales side, as well as strong privacy protections for our members.” Bloomberg says that Microsoft has no previous experience with ads on streaming services, but its advertising business is valued at around $US10 ($AU14) billion.
Honestly, the ad-supported tier doesn’t sound far from what I’m currently working with on Hulu, but this is Netflix simply putting a band-aid on a bullet wound. Netflix’s problem is not that subscribers are leaving the platform, it’s that subscribers are becoming fed up with the service’s “quantity over quality” approach. It feels like for every hit on Netflix, there’s a trillion misses, and those hits might not even be safe from cancellation. If Netflix really wants to retain its title as a titan of streaming, it needs to focus on limited, quality content as opposed to throwing everything at the wall to see what sticks.