Netflix teases ‘price cut’ plan that shows you ads for cheaper monthly fee

NETFLIX has teased a cheaper plan that could cost you less every month.

The streaming app’s chief has revealed that he’s open to a membership that’s supported by ads.

UnsplashNetflix has lost subscribers – and needs to find a way to build numbers up again[/caption]

Netflix doesn’t currently show ads before, during or after TV shows or movies.

But the price has steadily climbed over the years, with the top plan now costing £15.99 / $19.99.

Speaking to investors this week, Netflix admitted the it had lost subscribers for the first time in 10 years.

It revealed how 200,000 subscribers had ditched the app – and that a further 2million watchers could disappear by July.

Now Netflix chief Reed Hastings has admitted that a cheaper ad-supported plan is on the table.

He told investors that they would work it out “over the next year or two”.

And said the new plan would be great for viewers who “would like to have a lower price and are advertising tolerant”.

Netflix also believes that as many as 100million homes are now sharing subscriptions.

That’s a huge chunk of its 222million subscriber total.

This isn’t the first time we’ve heard about a cheaper Netflix tier.

Netflix has already tested a cut-price “mobile-only” plan.

And last year, analyst Michael Nathanson of Moffett-Nathanson Research sent a note to his clients explaining that Netflix may have to offer a subsidised ad subscription.

Streaming services like Paramount+ and Hulu already have an option like this but Netflix has always stayed away from including adverts.

According to NextTV, Nathanson’s note side: “Although Netflix management continues to strongly dismiss the idea of advertising, we think that view will be seen as a strategic mistake if future rates of subscriber growth start to fall short of Street expectations.” 

Experts think Netflix stays away from ads largely because it doesn’t want to spend money tracking its users for advert purposes and doesn’t want to get involved in the privacy issues that come with that.

Nathanson noted that Netflix is responsible for 6% of the total minutes spent watching.

That’s more than Hulu which is said to be responsible for 3%.

That means Netflix would be of great interest to advertisers.

It means Netflix adverts could reach a lot more streaming customers and wouldn’t necessarily need “hyper-targeted” ad campaigns to make money.

Netflix lost significant numbers of subscribers on its home turf in the first quarter of this year.

Around 600,000 viewers ditched the app across the USA and Canada.

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