For those who are thinking about saving money on streaming service subscriptions, Netflix’s new ad-tier subscription provides full access to the platform’s impressive catalogue of TV shows and movies without the expensive price tag of the ad-free subscription.
According to a new report from Bloomberg, Netflix’s new ad-based tier will cost between $7 to $9 per month, this would be around half the cost of the platform’s most popular ad-free plan which goes for $15.50 per month.
The report also claims that Netflix’s ad tier is expected to launch in the final three months of 2022 and the format of the ads will be around four minutes of commercials per hour shown before and during shows.
Through the newly announced ad tier, Netflix is hoping to encourage people to come back and for new subscribers to sign up on the platform for a lower cost in exchange for being served advertisements while watching shows.
Currently, according to the report, Netflix plans to place advertisements on TV shows both created by the platform and some licensed from other companies. However, the platform has also reportedly said it will not be placing ads on children’s programming or Netflix original movies.
Additionally, Netflix plans to differentiate itself from its streaming-service competitors by opting to not tailor ads to each specific viewer as it aims to avoid repeating ads again and again as some rival services do.
While the new ad-based tier will help Netflix attract customers looking to save a little bit of money each month, the platform has recently acknowledged it is facing a shrinking subscriber base and expects this trend to continue.
In an independent study by Ampere Analytics, Netflix’s new ad-based tier could bring $8.5 billion a year to the platform by 2027 through potential subscription fees and ad revenue.
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