The time has finally come: After mocking his plan with advertising at the beginning of this yearNetflix is apparently considering charging users between $7 and $9 for the level.
Gone are the days of Netflix’s exponential (and seemingly infinite) growth. The company, once a Goliath in the streaming industry, has run into some snags in recent months with share password and subscriptions with advertising raised as possible solutions to correct the course after subscribers started jumping ship. While an ad-supported level has been rumored on Netflix for a few months, Bloomberg reports that the company is preparing to pull the trigger sooner rather than later by introducing an ad-supported subscription plan that could cost users between $7 and $9 per month. Netflix currently offers three ad-free tiers. A monthly standard membership is $9.99, the Basic plan is $15.49, and a Premium subscription is $19.99.
Netflix stated that it would not confirm the Bloomberg report, with a spokesperson telling Gizmodo via email: “We are still in the early days of deciding how to launch a lower priced ad-supported level and no decision has been made. So this is all just speculation at this point.”
Netflix is in a previously uncharted place, as the service has never included ads in its programming, and Bloomberg says the company is looking to cater to cost-conscious consumers while trying to provide an enjoyable viewing experience. Sources told Bloomberg that this ad-supported level will feature four minutes of commercials per hour (I can’t expect eight minutes of commercials over the next stranger things ending). In addition, the company is expected to run ads before and during the shows, but not after. A timeline for the launch isn’t clear, but Bloomberg says the tier will launch first in “at least half a dozen” markets in the last three months of 2022 with a larger launch in 2023.
Netflix previously announced that it was tapping Microsoft to help develop the advertising campaign that will run on this new subscription plan. Netflix COO Greg Peters wrote in July that “Microsoft offered the flexibility to innovate over time on both the technology and sales sides, as well as strong privacy protections for our members.” Bloomberg says that Microsoft has no prior experience with ads on streaming services, but its advertising business is valued at around $10 billion.
Honestly, the ad-supported level doesn’t sound too far from what I’m currently working on at Hulu, but this is Netflix just putting a Band-Aid on a gunshot wound. Netflix’s problem is not that subscribers are leaving the platform, but that subscribers are getting tired of the “quantity over quality” approach to service. It seems like for every hit on Netflix, there are a trillion misses, and those hits may not even be safe from cancellation. If Netflix really wants to retain its title as a streaming titan, it needs to focus on limited, quality content instead of throwing it all away to see what sticks.
Update August 29, 1:10 pm EST: This article was uploaded to include a statement from Netflix.