NETFLIX could launch a new version of its app with ads later this year.
A leaked company memo suggests that a “cheaper” tier will be available as early as October.
Netflix could be made cheaper for some users through advertising
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Netflix could be made cheaper for some users through advertisingPhoto credit: Netflix
Earlier this year, Netflix confirmed that it was considering plans to roll out a cheap new Netflix membership within the next few years.
This would be possible by showing ads to viewers (for the first time ever).
The Sun revealed how the plan could cost as little as £5.49/$7.99 a month.
Now, a leaked Netflix memo seen by The New York Times reveals plans have been accelerated – with hopes of going live this October.
“It’s fast and ambitious and requires some compromises,” read the Netflix note.
Competing services already offer similar plans.
US Netflix competitor HBO Max charges its customers $15 a month – or $10 with advertising.
Netflix lost more subscribers than it gained earlier this year for the first time in a decade, so it’s now under pressure to gain more viewers.
“Every major streaming company besides Apple has or has announced an ad-supported service,” Netflix is quoted as saying.
“People want cheaper options for good reason.”
Netflix has already announced plans to crack down on users who share accounts.
It is estimated that 100 million households share subscriptions – a huge chunk of its 222 million member base.
Netflix has already started testing fees in some areas.
And it’s got fans going wild, with some viewers vowing to cancel their membership entirely.
The “Standard” Netflix plan currently costs £10.99 in the UK and $15.49 per month in the US.
But industry insiders who spoke to The Sun last month say they predict a cheaper plan could cost 50% less.
“Undoubtedly, it needs to be low enough to get users to subscribe and keep them engaged,” said Paolo Pescatore, a veteran media analyst at PP Foresight.
“Therefore somewhere between 25% and 50% less than what they pay today.
Paolo told The Sun: “It remains to be seen if it carries over to all current tiers or this becomes the cheapest base tier to get people to sign up.
“Then if they want a premium experience, they can pay more for it.”
We also spoke to industry analyst titan Michael Pachter, who agreed that a halved fee was on the horizon.
“Most services that offer ad support charge half that, so $7.99 is likely,” Wedbush Securities’ Pachter told The Sun.
“But Netflix might advertise a little less and charge a little more.
“So I would estimate between $7.99 and $9.99.”
He added, “With four 2-minute commercial breaks – one pre-roll and three more at the 12, 24 and 36 minute marks.”
A third insider — GlobalData’s Tammy Parker — thought Netflix could drop to about $10 a month in the US thanks to a $5 rebate.
“HBO Max is offering a $5 monthly discount for its ad-supported version,” Tammy told The Sun.
“So I would imagine Netflix would follow suit with that kind of discount as it moves forward with an ad-supported tier.”
However, the tech analyst added that Netflix could try to make its ads “less intrusive than other services.”
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Netflix does not currently show advertising before, during, or after TV shows or movies.
But the price has steadily increased over the years, with the top plan now costing £15.99 / $19.99.
Netflix boss Reed Hastings initially said a more favorable plan could materialize “year or two” to work – but plans may have accelerated now
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Netflix boss Reed Hastings initially said a cheaper plan could take a year or two to finalize – but plans may have accelerated nowPhoto credit: Netflix
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Source: thesun