Netflix plans to introduce ad-supported subscriptions after losing subscribers in the recent quarter. While rival streaming services have offered free or affordable plans with advertisements, Netflix has refrained from such plans. The news about Netflix introducing plans with advertisements has surfaced after it reported a loss of 2,00,000 subscribers globally. It was the first time in a decade that Netflix had lost subscribers
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The company estimates that it may lose up to 20 lakh subscribers in Q2 this year. Apart from ad-supported plans, the company is reportedly looking to generate more revenue through those customers who share their accounts with friends and family outside their homes. It seems that the company is also planning to provide users access to live sports in future.
Netflix plans to introduce ad-supported plans
Netflix ad-supported plans may arrive in a year or two, said Netflix CEO
In a recent earnings call, Netflix CEO Reed Hastings said that the company is “quite open to offering even lower prices with advertising, as a consumer choice.” He revealed that the ad-supported plans would not be available on Netflix for a year or two.
“Those who have followed Netflix know that I have been against the complexity of advertising and a big fan of the simplicity of subscription. But as much as I am a fan of that, I am a bigger fan of consumer choice, and allowing consumers who would like to have a lower price and are advertising-tolerant to get what they want makes a lot of sense,” Hastings said.
“It is pretty clear that it is working for Hulu, Disney is doing it, HBO did it. We don’t have any doubt that it works,” Hastings added. In the US, Netflix’s basic tier costs $10 (~Rs 760) per month, the standard tier costs $15.49 (~Rs 1,180), and the premium tier costs $20 (~Rs 1,520) per month. In India, Netflix offers four plans, such as a mobile plan, basic, standard, and premium. These are priced at Rs 149, Rs 199, Rs 499, and Rs 649, respectively.
The ad-supported tier will help Netflix make further inroads in markets like India, where rivals offer affordable as well as ad-supported plans. Netflix had the early lead in the streaming market but is now being faced with new competition, declining subscriber base, and consumer dropping these services. With an ad-supported tier, Netflix could replicate some of the success seen by its rivals.