Netflix plans to release a cheaper, ad-supported subscription tier in the near future – and if HBO’s equivalent level success is anything to go by, the streamer is a winner.
In a recent survey carried out by Internal (opens in new tab)28% of HBO MaxRespondents who subscribed said they are currently subscribed to the platform’s ad-supported subscription tier – despite the cheaper version of the streamer only having released in June last year.
For $9.99 (about £8 / AU$14) a month, subscribers to the ad-supported version of HBO Max can access the same library of movies and TV shows as those on the standard tier (which costs 14.99 per month), although without the ability to download content for offline viewing or stream it in higher quality than 1080p.
The Insider study surveyed 1,600 adults in the US, so its findings are far from conclusive. However, that staggering 28% is likely indicative of national trends, corroborating a growing industry sentiment that subscribers to streaming services are ready and willing to embrace cheaper, ad-supported subscription tiers if given the opportunity. to do it.
The data will be a welcome relief for Netflix and its executives, who are currently formulating their own ad-supported subscription tier in a bid to mitigate the streaming service’s impact. recent subscriber losses.
“We leave a large segment of customers off the table, which are the people who say, ‘Hey, Netflix is too expensive for me and I don’t mind advertising,’” Netflix co-CEO Sarandos recently admitted when asked about the decision. from the company. to adopt ads, having previously been against the idea. “We’re adding an ad layer; we’re not adding ads to Netflix as you know it today. We’re adding an ad layer for people who say ‘hey, I want a lower price and I watch ads.'”
As with HBO Max, Netflix plans to introduce this ad-supported tier for customers who are willing to pay a lower monthly price at the expense of ad-free viewing. This tier will be completely optional and ads will not start appearing on existing subscribers’ Netflix accounts.
It’s still unclear how much Netflix’s ad-supported subscription tier might cost, nor what parameters this more affordable package might put on content availability, although the HBO model provides a useful model (for potential customers as well as Netflix itself).
We also don’t know when this new tier of Netflix will launch. Co-CEO Reed Hastings has suggested a year-end arrival is a possibility, telling investors the company is “trying to figure that out in the next year or two”, but no concrete details have been offered yet.
We’ll share more details as we get them, but in the meantime, read our breakdown of why we think optional ads are really great for the health of Netflix and its content offering.