By Leah Montebello
Netflix is reportedly bringing forward the launch of its cheaper ad-supported tier as the streaming giant tries to keep hold of a dwindling subscriber base.
As first reported by Variety, the US firm has decided to launch the offering on 1 November as opposed to the planned 2023 launch.
This new offering will apply in the US, France, Germany, Australia and Canada, and is understood to be priced between US$7 and $9: a notable dip from the current cost of US$9.99 or $15.49.
The advert option will be an “addition” to the existing plans and is rooted in the long-term goal of giving “more choice for consumers and a premium, better-than-linear TV brand experience for advertisers,” said Netflix’s chief operating officer Greg Peters back in July.
TMT analyst at PP Foresight Paolo Pescatore said reports of a hurried plan was a “sign of desperation” from Netflix as it heads towards a key period and rival Disney+ launches its own budget offering in December.
A spokesperson for Netflix pushed back against rumours and said it was still in the “early days” of deciding how to launch its offering. “So this is all just speculation at this point,” they said.
However, the backdrop for an advertising option has been a long time coming for Netflix. Back in April, Netflix said subscribers were down 200,000 and predicting further losses.
Not only did this cause the share price to plunge dramatically, wiping $40bn off its market value, but it also set the stage for the next quarter, where it lost more than one million subscribers thanks to cost of living concerns driving users to switch off.
Disney+ meanwhile notably dodged wider industry concerns last month, adding 14.4m subscribers in the latest quarter and beating Netflix by counting 221m paid streaming users globally.
However, Netflix’s rocky performance has not discouraged new players entering the market.
Paramount launched its own streaming service Paramount Plus earlier this year, which costs viewers £6.99 a month (or £69.90 a year), and has no adverts.
President & CEO Bob Bakish toldCity A.M. in a round-table discussion at the time that he didn’t see streaming as a “winner takes all market”, stating that even with the additional pressures on household budgets people were still likely to have two or three subscriptions.
New streaming service SkyShowtime also announced this morning that it would officially launch on 20 September, across 20 European markets, bringing together NBCUniversal and Sky and Paramount Global.
Pescatore told City A.M. that integration would be key for streaming platforms looking forward.
“There are too many players chasing too few dollars. All in one is the holy grail and that role is certainly up for grabs,” he told City A.M. “Eventually we will see a return of the big bundle from the old world into this new streaming revolution.”
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