Netflix is to broadcast adverts for the first time from 3 November, as the streaming giant launches a new bargain-priced £4.99 monthly package in the UK, a bid to reignite its stalled global growth, according to The Guardian: “The move will see the world’s biggest streaming company – which has this year seen its first quarterly decline in subscribers in more than a decade – offer a significant reduction to its cheapest existing ad-free package which is £6.99 a month in the UK.”
Netflix, which is launching the ads-supported service called “Basic with Adverts” in 12 countries said that a “limited” number of films and TV series will not be available to viewers with the new subscription package “due to licensing restrictions with third parties”. But it will also be trying to restrict the potential cannibalization of full-priced subs by limiting the features available on the ads-supported tier. Customers, for example, won’t be able to download titles, as they can do with existing subscriptions.
In the US, Netflix will charge $6.99 a month for its ad-supported tier in the US, $3 below its cheapest ad-free offering, in a sign that the streaming giant intends to compete aggressively on price. Netflix is launching the ad-supported tier just over a month before Disney plans to launch its Disney+ ad-supported tier only in the US.
At $6.99, Netflix will be only $2 or so above the lowest-priced offerings that already carry ads from companies like Paramount Global, according to The Information: “The price is also well below the price of HBO Max’s ad supported option and $1 below what Disney plans to charge for the version of Disney+ with ads that launches in december. The big question is whether, by setting its price so low, Netflix will see some existing customers trade down to the ad-supported tier. Its ad-free tiers now start at $9.99 and range up to $19.99 a month. Disney is avoiding that situation by raising the price of the ad-free version of Disney+ by $3, and then setting the price for its ad-supported tier at the old ad-free price.”
