Ad-supported Netflix subscription tier to launch in November

At the start of November, Netflix will launch a cheaper ad-supported tier for its streaming platform in order to stem the loss of more than 1 million subscribers. It was originally scheduled to launch in 2023, but Variety reported last week that it had been moved to 1 November to avoid clashing with Disney+'s planned ad-supported tier.

The service is expected to launch in the US, France, Germany, Australia, and Canada, among other places, for between $7 and $9. Netflix subscriptions start at US$9.99 or $15.49 for a standard plan. Netflix's ad tier would be in addition to the existing tiers, meaning current subscribers would not see any advertisements.

Netflix said it had not yet made any decisions. “At this point, this is all just speculation,” the streaming platform said.

Netflix reported a loss of 1 million subscribers for the second quarter of 2022, its second consecutive quarter of declining subscribers, with shares falling 67%.

Greg Peters, the company's chief operations and product officer, revealed the company's thinking behind introducing advertising to support lower subscription fee.

He said Netflix wants to “provide an incredible experience for consumers, who choose to take the ad-supported offering, but also provide an incredible experience for brands and advertisers who want to work with us to make sure that we’re doing a good job of elevating what that looks like for them.”

He said he was optimistic that advertising on Netflix can “deliver an experience which is fundamentally different from the ad experience” on broadcast or cable television today.

The launch would focus on countries where there were “more mature ad markets,” Peters told investors in July there had been “a lot of excitement” in early discussions with advertising agencies.

“I think for them, they’ve wanted to connect with the titles, incredible content that (Netflix chief executive, Ted Sandros’s) team was putting out there. And I think we also share a perspective on what is a great experience for consumers and for advertisers,” he said.

“When you think about the kind of advertising we see, frequency caps, what’s a great ad experience, we’re noticing a high degree of alignment there. So that enthusiasm, that alignment is increasing sort of my optimism and the excitement that I’ve got to basically get this out there because I think it’s going to be a win-win-win for all parties involved,” Peters said at the time.

In July, Netflix announced that it would partner with Microsoft for ad technology and as a sales partner worldwide. Variety reported the two companies are seeking US$65 per thousand views, US$10m ad spend commitments from companies, and touting they will have 500,000 ad-supported subscribers by 2022.