In 2019, Netflix said in a letter to shareholders “we… are advertising free,” and added that being commercial-free is a “deep part of our brand proposition.”
That all changed Thursday while the streaming leader launched “Basic with Ads,” the platform’s eagerly awaited ad-supported subscription plan.
The new level will cost $6.99 a month in the US where it is presently accessible. It is likewise being launched in Canada, Australia, Brazil, France, Italy, Germany, Japan, Korea, Mexico, Spain and the United Kingdom at different various price points.
The organization has said that “current plans and members will not be impacted” and that “‘Basic with Ads’ complements our existing ad-free Basic, Standard and Premium plans.”
The new level will have the vast majority of what’s accessible with Netflix’s current $9.99 every month Basic plan. Be that as it may, the “Basic with Ads” option will incorporate an average of four to five minutes of commercials per hour. Those advertisements will be 15 or 30 seconds long and will play previously and during television series and movies.
Despite the fact that latest subscribers won’t see much of a change — except if they change to the new plan, obviously — the Netflix with ads launch is one of the most significant moments in the organization’s 25-year history.
CEO Reed Hastings sent shock waves through Hollywood and Madison Avenue in April when he said that the streaming goliath was available to commercials. Hastings had for years been inflexible about not putting ads on the platform.
Yet, the organization can no longer stick to that system. Netflix (NFLX) has had a terrible year. The platform lost subscribers for the first time in more than a decade and had its stock plummet. Netflix (NFLX) revealed last month that it is developing once more, yet the organization needs to show investors that it can get revenue even as its subscriber development has deteriorated.
“As we’ve been discussing over the past few quarters, improving our pricing strategy is an important near-term focus,” the company wrote last month, adding that the “reaction from advertisers so far has been extremely positive.”
In July, Netflix reported that it will partner with Microsoft (MSFT) to upgrade sales and technology for the new plan.
“We believe that more choice, especially for more price conscious consumers, will translate into meaningful incremental revenue and operating profit over time,” the company said last month. “That said, it’s still very early days and, since we’re keeping our existing plans ad-free, it will take us time to build up our membership base and the associated ad revenue.”