Netflix will begin running advertisements in October.
Later this year, NETFLIX may release a new version of its app featuring adverts.
According to a leaked business letter, a “cheaper” tier would be offered as early as October.
Netflix revealed earlier this year that it was exploring creating a new low-cost Netflix membership within the next couple of years.
This would be accomplished by showing advertisements to viewers (for the first time ever).
The plan might cost as little as £5.49/$7.99 per month.
According to a leaked Netflix letter obtained by The New York Times, the plans have been advanced, with a target launch date of October this year.
“It’s a fast-paced, ambitious project.”
Similar programmes are already available from competitors.
HBO Max, a Netflix competitor in the United States, charges $15 per month – or $10 with advertisements.
Netflix is under pressure to attract new members after losing more than it gained for the first time in a decade earlier this year.
Netflix is quoted as saying, “Every major streaming firm except Apple has or has announced an ad-supported service.”
“People desire lower-cost solutions for good reason.”
Netflix has already stated that it intends to take action against users who share accounts.
It believes that 100 million houses share subscriptions, accounting for a significant portion of its 222 million members.
Netflix has already started experimenting with charging in some places.
Fans are outraged, with some threatening to cancel their memberships entirely.
Netflix’s “Standard” plan costs £10.99 a month in the UK and $15.49 in the US.
However, industry insiders told last month that a lower package may cost up to 50% less.
“Unquestionably, it has to be low enough to entice users to sign up and keep them engaged,” said Paolo Pescatore, a PP Foresight specialist media analyst.
“As a result, they’ll be paying anywhere from 25% to 50% less than they are now.
“It remains to be seen if it will be extended out across all current tiers, or whether this becomes the basic cheapest tier as a way to get people signed up, and then they may pay more for a premium experience,” Paolo told.”
We also spoke with industry guru Michael Pachter, who concurred that a charge reduction was in the works.
“Most services that give ad help charge half,” noted Pachter of Wedbush Securities in an interview.
“However, Netflix might market a little less and charge a little more.”
So I’d say between $7.99 and $9.99.”
“With four 2-minute ad breaks — one pre-roll, three more at the 12, 24, and 36-minute markers,” he added.
Tammy Parker of GlobalData, a third insider, predicted that Netflix would drop to roughly $10 per month in the United States, thanks to a $5 reduction.
“For its ad-supported version, HBO Max gives a $5 monthly discount,” Tammy told.
“As a result, I believe Netflix would be interested.
