It used to be the case that excitement around Hollywood’s latest blockbuster was reserved for the cinema, with people lining up for hours just to reserve a ticket for the next box-office smash. But in recent years, it’s become clear that we are living in the Golden Age of TV – albeit, that of the streaming variety. Now, the world’s greatest writers are attracting the world’s greatest stars to the small screen thanks to incredible dramas, series and film that are made exclusively for platforms like Netflix, Disney+ and Amazon.
While it’s certainly made for entertaining viewing on our behalf, the abundance of choice has also seen audiences struggle to determine where exactly their money should go. No longer is it enough to have the next big series, you now also have to offer a cheaper subscription rate or more enticing deal to garner loyalty from those who are all too ready to cancel and move to a different platform, should they find themselves uninspired by the viewing options come one Friday night.
Now, it seems Netflix is leading the charge and as the streaming wars only intensify, it’s set to launch a cheaper ad-supported tier come November. Though it was first reported that the company would be offering such an option in 2023, it comes after it was announced that Netflix lost some 1 million subscribers this year. And with Disney+ launching an ad-supported tier in December, it seems Netflix now wants to be ahead of the game.
Set to be priced between US$7 and $9, the service will launch across the US, France, Germany, Australia and Canada, before moving onto other places. Currently, the cheapest subscription offered on the platform costs $15.49.
For those who profane the sight of ads, the good news is that the ad tier won’t apply to existing members. You won’t see any ads on Netflix unless you downgrade to the cheaper option upon its launch. According to a spokesperson for Netflix, no decisions have been made just yet regarding the launch. “We are still in the early days of deciding how to launch a lower priced, ad-supported option and no decisions have been made,” they said. “So this is all just speculation at this point.”
It’s hoped that by introducing ads, not only will Netflix appeal to those unwilling to fork out the cost of a standard subscription for the service, but will then also be able to work with brands and advertisers who want to work the streaming platform. While it could mark the beginning of an exciting opportunity for such brands, it’s hard to see just what this will look like for Netflix, too.
According to the company’s chief operations and product officer, Greg Peters, the company are optimistic they can “deliver an experience which is fundamentally different from the ad experience” on broadcast TV today. Netflix will also focus on those countries where there were “more mature ad markets,” according to Peters. But for these companies, such advertising opportunities won’t come cheap, with reports suggesting Netflix – who has partnered with Microsoft for the ad technology and as a sales partner globally – seeking US$65 cost for a thousand views, and a minimum US$10 million annual spend commitment from companies now.
As Peters told investors, “I think for them [advertising agencies]…they’ve wanted to connect with the titles, incredible content that [Netflix chief executive, Ted Sandros’s] team was putting out there. And I think we also share a perspective on what is a great experience for consumers and for advertisers. So when you think about the kind of advertising we see, frequency caps, what’s a great ad experience, we’re noticing a high degree of alignment there.”
He added, “So that enthusiasm, that alignment is increasing my sort of optimism and the excitement that I’ve got to basically get this out there because I think it’s going to be a win-win for all parties involved.”
It might be a great move by Netflix and those advertisers looking to come onboard, but it remains to be seen just how many people are willing to see their weeknight entertainment interrupted by ads. For so long, the allure of Netflix has been uninterrupted viewing, and while the cheaper option certainly is tempting, we can only think that the novelty that is streaming would wear off completely as soon as those ads begin popping up.
