Netflix is set to offer a cheaper subscription plan in a new shakeup to help keep people in its entertainment ecosystem.
The move was revealed by Netflix co-CEO Reed Hastings during the company's quarterly earnings (via THR (opens in new tab)), where it was confirmed that Netflix would look at rolling out a less expensive plan supported by advertising in the future. Since launching as a streaming service in 2007, Netflix has never offered ads in any form.
The decision looks to have been made as a result of the platform losing 200,000 subscribers within the first three months of 2022 – the first time it has lost subscribers in over a decade.
Additionally, it's to further help Netflix to compete with increased competition on the market, such as Disney Plus, Amazon Prime Video, Hulu, HBO Max, Apple TV Plus, Britbox, and more.
"Those who have followed Netflix know that I have been against the complexity of advertising, and a big fan of the simplicity of subscription," said Hastings. "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 – get what they want, makes a lot of sense." He added: "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".
No date or pricing was announced for the new Netflix ad-supported version but it was confirmed that it would explore its options "over the next year or two". Furthermore, whenever this new subscription plan launches, it would be backed by Netflix as a publisher meaning no data tracking or ad-matching.
The Netflix standard plan (opens in new tab) is currently priced at $15.49 / £10.99 / AU$16.99 per month, a rise in cost that was made effective in March this year. A slightly cheaper basic plan for fewer devices and a slightly higher price for more devices and Ultra HD is available as well.
These price hikes become even more frustrating for viewers when Netflix keeps cancelling its original content, with over half a dozen Netflix shows already cancelled in 2022. Whether or not adverts would help these series receive a longer life span is yet to be determined, though I'm dubious.