Netflix may be considering pricing its new advertising-supported tier at US$7 or US$9 a month, half as much as its current most-popular plan, the Standard, which costs US$15.49 monthly with no commercials, Bloomberg reported.
Netflix plans to sell about four minutes of commercials per hour for the ad-supported service, people familiar with the company’s plans told Bloomberg. According to them, the company will show advertisements before and during some programs, but not after. The firm is also telling advertisers it wants to make smaller deals upfront so it does not overpromise and overwhelm viewers with the spots.
Netflix plans to introduce its new cheaper option during the final quarter of this year in at least a half dozen markets. The company has said the full global rollout may have to wait until early next year. The company believes the cheaper tier will both attract new price-conscious customers and give those ready to cancel a less-expensive alternative. According to media consultancy Ampere Analytics, this new tier could generate US$8.5 billion a year globally for Netflix by 2027, including subscription fees and ad sales.
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