Netflix ads plan launch brought forward to November to beat Disney

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A Netflix ads plan – in which subscribers pay a lower monthly fee in return for watching ads – will reportedly launch much earlier than previously expected.

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The launch is said to have been brought forward from sometime early next year to November of this year. It’s believed the company wants to introduce the ad-supported tier before Disney does the same in December …

Background

Although Netflix remains the most popular streaming video service in the US, it has been struggling to maintain both its position and its profitability.

As far back as 2019, the company started making noises about password-sharing having an impact on its revenues. This is where one household subscribes, and then shares the password with family or friends living elsewhere – something the company’s terms and conditions prohibits. The company later tested trying to monetize it.

Netflix lost 200,000 subscribers in the first quarter of the year. Efforts to try to make-up the loss by squeezing more cash from its remaining subscribers back-fired, with even more people cancelling their subscriptions.

Netflix ads plan

Its next idea was to offer a cheaper ad-supported tier. The company teamed up with Microsoft for this, and has been recruiting senior ad execs.

The company confirmed its plans in an earnings call, saying that the new service would launch “in the early part of 2023.” But the WSJ reported that the company is now bringing forward the launch date to November 1 this year, and this has now been corroborated by Variety.

Netflix is moving up the timeline for the debut of its cheaper, ad-supported plan to November — in order to get out before the Dec. 8 launch of the Disney+ tier with advertising.

In July, Netflix told investors that it was targeting the launch of the ad-supported plan “around the early part of 2023.” But now, Netflix’s ad-supported is set to go live Nov. 1 in multiple countries, including the U.S., Canada, U.K., France and Germany, according to industry sources who have been briefed on the streamer’s plans. That would be a little over a month before Disney+ Basic, priced at $7.99/month, hits the market in the U.S.

As the piece indicates, its assumed that the change of plan is intended to beat Disney+ to the punch. Plans for a Disney+ Basic tier, with ads, leaked back in March, and were confirmed by the company earlier this month. The new plan, which will replace the existing $7.99 ad-free bottom tier, launches on December 8. Existing subscribers who want to remain free from ads will have to pay $10.99/month.

Netflix claims that it has not yet decided on its plans, but both the WSJ and Variety have been given the date by ad buyers approached by the streaming service. It’s expected that the subscription cost will be in the $7-8/month range, and that you’ll see four minutes of ads per hour.

Photo: Dima Solomin/Unsplash

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Author: Subham

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