Netflix is undergoing some pretty drastic changes, as the streaming company has had to make some adjustments on both the business and content fronts. However, the latest of these might be the first to make the platform cheaper.
As reported by Bloomberg, Netflix is already pondering setting the price of its ad-supported plan in the region between $7 and $9 for its standard package, currently set at $15.49, though this new budget-minded option could stay on hold until 2023. The strategy would look to onboard new prospective customers who might be willing to tolerate a few minutes of ads in-between their binge sessions, but how many ads would Netflix impose on this plan?
Well, according to that same report, the ad-supported tier would see Netflix users watch 4 minutes of commercials for each hour of normal viewing time in order to enjoy this discount. The strategy had been mentioned before in the company’s internal memos, taking note of its competitors HBO Max and Hulu, with the two currently offering plans with ads that have boosted their growth. That playbook will also be copied by Disney Plus towards the ends of the year, starting on December 8 for the sum of $7.99, the current cost of its regular service.
While the exact rollout date for Netflix's ad-supported plan stands at anywhere between late 2022 and 2023, there’s already been some messy trials to curtail Netflix password sharing in some parts of Latin America. Such tests have some confusing results for the end user. Most of Netflix's changes have come on the back of news earlier this year that the company was losing subscribers, despite the actual numbers not being as bad as projections suggested and Netflix remaining a profitable business.
Funnily enough, Netflix and Hulu are the sole two streaming companies that actually earn more money than they spend, a position largely owed to their early entry into the streaming wars, although it's quite common for fast-growing tech unicorns to not pay much attention to profitability. Instead, it’s the sudden halt to growth that's taken a big hit to Netflix stock, especially now that Disney Plus, Amazon Prime Video, and HBO Max have a growing influx of users.
Cancelations are also at the day’s order, with the poorly-reviewed Resident Evil being the latest show to be axed. Meanwhile, House of the Dragon and Rings of Power prove other streamers are spending like there’s no tomorrow.
Source: Bloomberg