Netflix revealed on Thursday that a streaming plan with adverts will be introduced by November for around $7 a month in a move to bring in new subscribers.
The $6.99 cost for the ‘Basic with Ads’ plan is $3 less than Netflix’s lowest priced plan without commercials. It will only be available in 12 countries at first and then eventually extending out.
Users subscribing to the plan will see four to five minutes of advertising per hour, with newly released films having limited advertisement to ‘preserve the cinematic experience.’
However, around 5 to 10% of Netflix’s programming will be unavailable on the ad-supported alternative due to licensing restrictions. This comes as shares for the streaming giant went up 5.4% after the company stock had fallen 62% this year.
The ad-plan also comes despite years of avoiding the move by Netflix’s executives. Meanwhile, competitors such as Disney+ and HBO Max already have ad-supported options that cost less.
Netflix reported around 220.7 million paying subscribers as of June, which is a drop of nearly 1.2 million from the start of the same year of 2022. It will remain to be seen how this new service will impact viewership, with Netflix itself remaining conservative about such data as of yet.
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