Netflix Ad-Supported Tier Pricing Could Be Its Undoing
Netflix says that it’s still in the early phases of developing itsad-supported subscription plan, but rumors seem to paint a different story. As with any leaks, the unofficial details could change or be proven entirely false by the time the tier goes live, but at this time it sounds like the video streaming giant already has most of the pieces in place. The big exception is that the company may still be in negotiations with studios and content providers to ensure its ad-supported plan has the best possible catalog when it launches. A new report, however, claims the more affordable tier is a mixed bag, and the details — if they prove true — may cause consumers to seriously contemplate whether the pros outweigh the cons.
Netflix ad-supported strategy
According to a report fromBloomberg, Netflix may set the price of its ad-supported tier somewhere between $7 and $9 per month. The streaming service already has a basic $9.99 per month subscription, but that is limited to only 480p video quality. In comparison, the platform’s standard and most popular tier offers high-definition streaming for up to two devices for the price of $15.49 a month.
The one thing that could go in Netflix’s favor is the length of the ads. According to the report, Netflix plans to show four minutes' worth of ads for every hour of streaming, which is far shorter than what most other ad-supported streaming services have. The ads will reportedly be shown before the start of a video and every hour thereafter, but no ads will be shown after the video ends, the report claims. Whether they will be skippable is still unknown. A previous report claimed that Netflix won’t show ads on kids' shows, as well as new original movies, though the latter would apply only for a brief period after the content premieres on the service.
