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Netflix’s new ad-supported plan is poised for an early release

To outmaneuver rival Disney, subscription streaming service and production company Netflix plans to introduce a new ad-supported tier on November 1, 2022.

It is mainly released in the main markets in USA, Canada, UK, Germany and France.

In April, it announced plans to introduce streaming service plans with ads to be made available at a lower price point, and this will go hand-in-hand with existing ad-free plans.

Consequently, in July, it informed investors of its plan to launch the new format of the subscription service in early 2023.

Why is Netflix releasing it so early??

Netflix's new ad-supported plan is poised for an early release

Photo credit: Netflix

However, Netflix has decided to release the plan early in order to outperform Disney+ and its economical, ad-supported version of the platform. The latter has scheduled the release of its ad-based subscription model for December this year.

Disney is increasing the price of its main plan while the current price of its ad-supported plan remains the same.

Although, except for a variety reportthere was no official communication from Netflix in this regard.

Collaboration and CPM from Microsoft

On July 14, Netflix also announced one significant development that hinted at the possibility of the recent subscription model. She brought Microsoft on board as a technology and distribution partner to place the video ads on the platform.

Netflix has also met with some ad buyers to facilitate the process. According to buyers, the platform charges around $65 CPM, a marketing term that denotes the likely cost of reaching 1,000 viewers.

Compared to other platforms, Netflix’s price falls into the premium category. At around $20, current market prices for pre-rolled ads are significantly less. For reference, tech giant Google’s average CPM costs around $2.80.

Also Read: Recent Hiring Notices ‘Netflix’ Takes Moves Into Cloud Gaming

price expectations

There’s no official confirmation, but the ad-supported subscription plan is expected to be Netflix cheap between $7 and $9.

For recording, the most popular plan costs $15.49 per month with no ads, and the 4K plan costs $19.99 monthly.

The new plan effectively halved the subscription cost in exchange for minimal advertising.

ad frequency

It also displays four minutes per hour, which is significantly less than other competitors. Ads are placed before and in the middle of a show, not after.

Unlike streaming services like Hulu, Netflix will limit repetitive ads to promote a positive consumer experience.

sales potential

Netflix will measure viewer response to the plan after its pre-release in select markets noted above. The final launch on the global market is scheduled for 2023 and there might be some changes in structure and pricing.

The streaming platform has established itself as a consumer-friendly alternative to television. In the age of OTT services, Netflix’s upcoming plan has the capacity to generate $8.5 billion in global revenue per year by 2027. (c)

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