Netflix Considers Pricing Ad-Supported Tier Below $10

Netflix, advertising, subscription, Netflix tiers

Netflix’s new ad-supported payment plan, a cheaper alternative to its regular model, could be priced between $7 and $9 per month, Bloomberg wrote Friday (Aug. 26).

This plan, set at around half the $15.49 per month that the regular plan is, will attempt to draw in subscribers who will watch some ads in exchange for a cheaper price.

Netflix’s goal is to keep to a balance between catering to the cost-conscious and maintaining a watchable experience, the report said. The cheaper plan will present about four minutes of commercials per hour, which is less than many streaming competitors have in their own ad plans.

The company plans to show some ads before and during some programs, though not after — and Netflix is telling advertisers it wants to make smaller deals so as not to “overpromise and overwhelm viewers,” the report said, citing unnamed sources.

The plans could begin rolling out in the final three months of 2022 in at least a half-dozen markets. The final rollout might be delayed until next year.

It came as Netflix was losing subscribers en masse earlier in the year, with the company saying it had shed 200,000 subscribers in the early months, with millions more projected for the summer.

And the company also saw disappointing earnings in April.

Read more: Microsoft to Help Launch Ad-Supported Netflix

PYMNTS wrote that Netflix picked Microsoft to help as its ad tech and sales partner to make the ad-supported plan.

“Microsoft has the proven ability to support all our advertising needs as we work together to build a new ad-supported offering,” Netflix said in a company blog post in July. “More importantly, Microsoft offered the flexibility to innovate over time on both the technology and sales side, as well as strong privacy protections for our members.”

The company attributed its losses to the increased competition, inflation and the fact that it had stopped offering services in Russia because of that country’s war in Ukraine. Exiting the Russian market cost the streaming giant 700,000 members.