Netflix’s ad-supported tier could end up costing $7 to $9 a month

For the longest time, Netflix refused to offer an ad-supported tier like its competitors. But the company changed its tune when it lost customers for the first time in ten years, with CEO Reed Hastings stating the company was “quite open to offering even lower prices with advertising, as a consumer choice.” In June, Co-CEO Ted Sarandos confirmed that the company would introduce an ad-supported subscription plan at a more affordable price. As we inch closer to the end of the year, more details are starting to appear about the service, and now it looks like we might have a price.

According to Bloomberg, Netflix is considering a price point of $7 to $9 for its upcoming ad-supported tier. Currently, the service charges $9 for its Basic plan, $15.49 for its Standard plan, and $19.99 for its Premium tier. Customers who opt into the ad-supported plan will experience about four minutes of commercials for every hour of watched content. This is quite a bit less compared to traditional cable shows, which feature 10 to 20 minutes of ads per hour. It plans to show these ads before the show starts and during, but not after. Netflix is currently in negotiations with advertisers and wants to start small in order not to overwhelm its customers.

Rumors have long stated that the company will introduce the ad-supported service towards the end of the year. Bloomberg states that the initial rollout will be in a handful of markets, with a full rollout expected in 2023. Netflix is working hard to find to try and find a balance that will be good for the company and good for customers. It hopes that with a slow rollout, it can fine-tune the ad experience to avoid issues found on other platforms. Later this year, Disney will also introduce an ad-supported tier for its Disney Plus service. Disney Plus has been operating at a loss but has recently added 14.4 million subscribers, giving it 152.1 million total subscribers. With that said, going forward, the competition will be even tougher as streaming services get more aggressive in pricing and content.

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Source: Bloomberg

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