This July 2017 photo shows the Netflix logo on an iPhone in Philadelphia. The company will soon offer an ad-supported plan.
AP
Netflix is joining other major streaming services in offering a cheaper ad-supported plan starting November 3 in the US, the company said.
Under the new plan, which will cost $6.99 per month, the audience will see The 15- to 30-second commercials run before and during the program, the company said in an Oct. 13 press release.
There is a plan 3 dollars cheaper than the company’s current “Basic Plan,” which costs $9.99 per month. The most expensive subscription is Netflix’s Premium plan at $19.99 per month.
The California company — the most popular of all streaming services with more than 220 million paying subscribers — has long resisted offering an ad-supported plan, according to Indiewire.com.
Other prominent streaming platforms already offer ad-based, discounted subscriptions. Users can subscribe to HBO Max for $9.99 a month with ads or $14.99 per month without ads, and viewers can opt for $7.99 per month, an ad-based subscription to Hulu or pay $14.99 per month to avoid ads.
Disney+ plans to launch basic ad-supported subscription in December, according to the company.
Netflix Chief Operating Officer Greg Peters told reporters on an Oct. 13 phone call that he believes the company’s new ad-based option will help grow membership and increase revenue for the company over time.
Netflix has lost its way 970,000 subscribers during the three-month period ending June 30 — less than the 2 million it previously predicted it would lose, according to CNBC.
Peters told reporters that he thinks the more affordable plan will be a good option for consumers who want to pay less for the service.
“In general, to offer the broad range of entertainment that we have at a lower price to (consumers) is a consumer-centric and consumer-friendly approach with a limited and ideally quite carefully placed advertising experience,” he said.
Among the streaming services three of the most popular TV shows “Stranger Things” Season 4, “The Squid Game,” “Dahmer: Monster: The Jeffrey Dahmer Story” and “Bridgerton” Season 2, the company said.
Some viewers expressed their disappointment with Netflix’s message on social media.
“Goodbye Netflix,” the user tweeted. “Your show not worth it paying for ads, you (don’t) even have a proper navigation system on your site.”
“The time will come cancel Netflix if I have to watch commercials,” another person tweeted.
Netflix’s profits soared 9% compared to last year in the second quarter of 2022, according to a letter sent to shareholders in July, but the streaming service faces stiff competition from other streaming platforms.
“Despite that streaming video is viewed to be a value, a leisure thing, households have too many different types of streaming from formidable competitors Netflix besides them,” Kenneth Leon, director of research at CFRA Research, an independent research and analysis firm, told the LA Times. “So we see that the risk is really a recession.”
The company predicts it will add 1 million subscribers in the third quarter of 2022, up from 4.4 million in the year-ago quarter, it said in a letter to subscribers.
October 13 Netflix share price is closed at $232 per share after opening at $212 per share.
This story was originally published October 13, 2022 at 6:32 p.m.
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