We know that Netflix is going to introduce a cheaper tier that's supported by ads, but what we don't know is how much cheaper it's going to be. A new report suggests that $7-$9 is the price point that Netflix executives are currently considering.
That's per sources speaking to Bloomberg, and it's believed that the streaming service will insert around four minutes of ads in every hour of programming for this particular tier. Netflix will apparently show ads before and during programs, but not after.
The $7-$9 price bracket is just below the $9.99 tier that Netflix currently offers, but that only gives you standard definition streaming quality. High definition streaming costs $15.99, so the new tier would be around half that. The 4K plan costs $19.99 a month.
No repeats
We're presuming that Netflix will price the new ad-supported service in a similar way internationally, so just below whatever the most affordable tier currently is: in the UK that's £6.99 a month, and in Australia it's AU$10.99 a month.
According to Bloomberg, the Netflix with ads option is going to launch in selected markets sometime in October, November or December. As previously announced, Microsoft is handling the advertising sales part of the operation for Netflix.
The report also says that Netflix is keen to avoid putting off viewers by making sure ads don't repeat and aren't too precisely targeted. In other words, most people are going to see the same ads appear in between programs.
Analysis: the next big Netflix bet
Netflix will be hoping that its new plan is a hit, as it grapples with falling subscriber numbers and increased competition from the many other streaming services that have popped up in recent years. It will bring in revenue from both the subscription fees and the advertising slots that it sells.
As per the Bloomberg report, executives at Netflix are aiming to attract new price-conscious customers, as well as giving people who are ready to cancel Netflix another option to think about before they stop paying.
However, having to sit through adverts might not be the only downside of the new plan: code hidden in the Netflix app suggests that subscribers on the ad-supported tier won't be able to download shows and movies to their devices to watch offline.
We'll have to wait and see whether or not that turns out to be the case, but it may be something else to consider when working out if a Netflix subscription makes sense for you – and which tier offers the best value for money for what you want to watch.
