What you need to know
- Netflix's ad-supported tier may have the same price as Disney Plus' ad-supported plan.
- A new report claims Netflix's upcoming cheaper plan could cost between $7 and $9 per month.
- The ad-supported tier is supposed to launch in a few markets in the last quarter of 2022.
In April, Netflix walked back on its long-held position against ads by confirming that it plans to launch an ad-supported tier in the future. Now, a new report may have revealed its price.
According to Bloomberg, which cited sources privy to the plan, Netflix will charge subscribers between $7 and $9 per month for movies and shows that will be interrupted by commercial breaks. It will supposedly be available initially in over six countries in the last quarter of 2022, with plans for a wider release early next year.
Netflix sees ads as a solution to the challenges facing the streaming service. During its first-quarter earnings call, Netflix's co-founder and co-CEO Reed Hastings said the service was open to offering a cheaper plan with ads. The goal apparently was to cater to consumers who wouldn't mind seeing ads in exchange for a lower price.
The confirmation came as the company lost 200,000 subscribers in the first quarter of this year. It blamed password sharing for the loss, though it's worth noting that the decrease was reported shortly after Netflix raised subscription prices in the United States and Canada.
The upcoming cheaper plan will supposedly air approximately four minutes of ads per hour. Commercial breaks will appear before and during movies and shows, according to Bloomberg.
However, Netflix told The Verge that the report is purely speculative. A company spokesperson was quoted as saying that the service is in the early stages of developing the new tier and has yet to set things in stone.
If the rumor is true, on the other hand, it means Netflix may be taking its fight to Disney+, which offers its own ad-supported tier for $7.99 a month. Netflix's upcoming contender could undercut that pricing by a small margin.
Seeing as this will be Netflix's first time introducing ads, it is critical for the company to tread uncharted territory by striking a balance between offering a cheaper subscription and reducing friction to the user experience, Bloomberg noted.
