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Thursday, August 11, 2022

Netflix’s ad-supported plan is coming in 2023: What we know

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(Pocket-lint) – Netflix’s upcoming ad-supported plan is months away from release. Here is everything we know so far about the new tier, including how much it might cost and whether all your favourite shows and movies will still be available to watch. 

What is Netflix’s ad-supported plan?

  • Cheaper subscription tier: A new plan that will serve up ads and cost less

Netflix has long been available to stream without ads. Soon, it will introduce a new subscription plan that will serve up ads. It will sit alongside the classic ad-free offerings, but it will be cheaper. It’s already been confirmed that Netflix will launch this new subscription tier, but we don’t yet know when it will be available or how much it’ll cost.

How much will Netflix with ads cost?

  • Pricing: Not yet known, but regular Netflix starts at $10/mo

There is no word on Netflix’s pricing for the ad-supported tier. Currently, the cheapest Netflix-subscription plan in the US costs $9.99 a month without advertisements.

What sort of ads will Netflix show?

  • Advertisements: Little is known, but Microsoft’s platform will serve up all ads

All that’s known so far is how the advertising will be delivered, as Microsoft has announced itself a partner for the new service.

It has signed a deal with Netflix to be the technology and sales partner for the new tier, which means it will supply the commercials. All adverts to be seen by viewers will come through Microsoft’s platform: “Marketers looking to Microsoft for their advertising needs will have access to the Netflix audience and premium connected TV inventory,” it said in a press statement.

The plans are clearly ramping up, therefore, although we should expect the new tier to launch anytime soon.

Netflix boss Greg Peters recently claimed that there’s still a lot of work to do before it will be ready: “It’s very early days and we have much to work through,” he said. “But our long-term goal is clear: more choice for consumers and a premium, better-than-linear TV brand experience for advertisers. We’re excited to work with Microsoft as we bring this new service to life.”

Will Netflix’s ads tier include everything?

  • Restrictions: Netflix is still negotiating and may not include all titles

Netflix has seemed to suggest its upcoming ad-supported plan won’t have all the same movies and show you can currently watch on the ad-free streaming service. 

During Netflix’s Q2 2022 earnings interview video, company executives discussed how the ad-supported tier will have the vast majority of content. However, it sounds like Netflix is currently still talking to studios about including some titles, and not all of them will make it over.  If the ad-supported plan were to launch right now, most users would still have a great experience, Netflix is claiming. 

“Today, the vast majority of what people watch on Netflix, we can include in the ad-supported tier”, said Netflix co-CEO Ted Sarandos.

“There are some things that don’t…  that we’re in conversation about with the studios on, but if we launched the product today, the members in the ad tier would have a great experience. We will clear some additional content, but certainly not all of it, but we don’t think it’s a material holdback to the business,” Sarandos explained.

CFO Spencer Neumann added: “It’s certainly a nice to have, but it’s not a must-have”. Neumann continued: “As Ted says, we can launch today without any additional content clearance rights. Hopefully we can supplement that, but we’ll be disciplined in what we do”.

See below to watch the full conversation in context. It starts at around 18:55.

The Wall Street Journal first reported last week that Netflix was negotiating with studios to include content on a tier with ads. 

When will Netflix’s ad plan be available?

Although it’s unclear what will be missing from the upcoming ad-supported plan, Netflix said is on track to launch the new tier sometime early next year.

Netflix said it plans to “start in a handful of markets where advertising spend is significant” – which likely means the US and the UK.

“Our intention is to roll it out, listen and learn, and iterate quickly to improve the offering,” the company said in a letter to shareholders in July. “Over time, our hope is to create a better-than-linear-TV advertisement model that’s more seamless and relevant for consumers, and more effective for our advertising partners. While it will take some time to grow our member base for the ad tier and the associated ad revenues, over the long run, we think advertising can enable substantial incremental membership (through lower prices) and profit growth (through ad revenues)”.

Writing by Maggie Tillman.





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