Science

Netflix will offer discounted, ad-supported option

Netflix will unveil the first version of its video streaming service with commercials next month, giving cost-conscious viewers the chance to watch most of its shows at hefty discounts in exchange for commercial interruptions.

The ad-supported service is set to debut on November 3 as Netflix tries reverse the decline in customers, It will cost $7 a month in the US, which is a 55% markdown from Netflix’s most popular $15.50-per-month plan, which is ad-free.

According to a Thursday post by the company’s chief operating officer, Greg Peters, Netflix’s ad-supported option will also be available in Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain and the UK.

In addition to serving about four to five minutes of ads during each hour of viewing, Netflix subscribers who sign up for the cheaper service won’t be able to download TV shows and movies to watch while their devices are offline. Peters also stated that a “limited” amount of programming available on the commercial-free service would not be on the ad-supported version due to licensing issues.

Netflix’s 15-year-old streaming service has remained commercially free until now, but the Los Gatos, Calif., company decided to go in a new direction six months ago after reporting its first loss in subscribers in more than a decade. did.

Customer erosion caused by a more than $200 billion decline in shareholder wealth during the past 11 months has driven its share price down significantly. Shares rose after Thursday’s announcement, but have lost nearly two-thirds of their value since reaching their peak last November, when the streaming service was still on the rise.

During the first half of this year, Netflix lost 1.2 million subscribers, leaving it with about 221 million. Management predicted in July that it would regain about 1 million of those customers during the summer months. Data for the July-September period is to be disclosed on Tuesday.

Netflix is ​​betting a lower-priced option with ads will be particularly popular at a time when persistently high inflation is pressing millions of households to curb their spending, especially on discretionary items like video streaming. The streaming market has also become crowded with stiff competition from the likes of Amazon, Apple and The Walt Disney Co., which is preparing to introduce an ad-supported version of its service soon.

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