According to Bloomberg, Netflix’s new ad-supported plan will cost between $7 to $9 per month, offering about half-price savings compared to its current standard, ad-free tier, which charges $15.49 monthly. This structure notably differs from their similarly advertising-agnostic competitor Disney+, which intends to raise the price of their commercial-free plan and set their new ad-supported tier at the current standard subscription price, while Netflix is actually offering customers a discount from the start.
In regards to how the new tier will affect the user experience, the company has apparently set clear parameters to avoid a messy transition or hostile consumer interface. Initially, the streamer will only sell four minutes per hour to advertisers (compared to cable network’s typical range of 10-20 minutes per hour) and does not expect to push ads during children’s programs or their original movies. They will most likely appear on every Netflix original series as well on shows licensed to the streamer though. Commercials will air strictly before or during a show, and the service won’t repeat the same spots for the most part.
Netflix plans to launch their ad plan in “at least a half dozen markets” starting in Fall 2022, with the goal of reaching all markets by Spring 2023. The streamer is working in partnership with Microsoft, who came on board as Netflix’s exclusive advertising technology and sales partner in July.
The new tier arrives after a tumultuous year for Netflix, which suffered back-to-back subscriber losses in the first two quarters of 2022. Although the service redefined the television advertising industry years ago by refusing to run spots during their programs, the company’s course correction trades consumer-forward aesthetics for a more price-conscious alternative. Sources did not confirm or elaborate on the proposal that alleged the cheaper tier would host a smaller catalog. There has also been no word on how Netflix plans to share their notoriously opaque audience metrics, a crucial selling point for advertisers.