Netflix continues to share details about its new “cheap” ad-supported subscription, the existence of which was confirmed by the service itself just last June. During the financial report corresponding to the second quarter of 2022, the platform announced that their goal is to launch the plan with announcements early next year. At the moment, yes, they have not yet set a specific date; Neither is its price.
One more time, Netflix has reiterated that subscription with ads will not replace any of the currently available plans. It will be a completely new proposal that will work as the entrance membership to the service. Focused on all those people who, for one reason or another, do not want —or cannot— pay the highest price levels. And, on the other hand, they have no problem consuming advertising while watching series or movies.
“Our ad-supported lower price offer will complement our existing plans, which will remain ad-free,” Netflix stresses. The platform believes that it is at the ideal time to launch a new subscription at a lower cost. Of course, it will be optional, so consumers will always have the final decision. If you are not interested in this plan, you can continue in the one you are already on.
Those who opt for the subscription with Netflix ads, yes, will have to accept a limitation: not all the content of the platform will be available, although the vast majority will. The key is the contracts that Netflix has closed with other studios, which would limit the distribution of its content in plans with advertising. Netflix’s own content, on the other hand, would not be a problem.
With the introduction of Microsoft as its main partner to launch subscription with ads, Netflix took a key step to consolidate its idea. Those of Redmond, in addition to providing the infrastructure required to display advertising in the content, will also provide a system for Netflix to manage its relationship with advertisers. In fact, it promises them an experience premium.
A subscription with ads to reverse the trend of Netflix
In your financial report, Netflix reported the loss of 970,000 users, the largest in its history. However, the figure is not as disastrous as expected. Previously, they had estimated that 2 million subscribers would leave the service during the past quarter. The figure has not only been reduced by more than half, but they also believe they can recover them as soon as the next quarter. Of course, from paper to reality there is a world of difference.
One point that does have Netflix very concerned is that its number of subscribers in the United States and Canada, two key markets, fell by 1.28 million in the previous quarter. The good news is that in other countries they gained a significant number of users and that allowed them to mitigate the loss in North America.
Without a doubt, the fourth season of stranger things was one of the main reasons why Netflix exceeded its own expectations in the second quarter. Splitting it into two batches of episodes ensured that a good number of subscribers kept their membership for at least two months. It was an unusual move for original content, but the results were positive.
The launch of a cheap subscription with ads, as well as the change in strategy that prioritizes the quality of content instead of quantity, are part of the service’s strategy to withstand financial blows.
In addition, they are also devoting efforts to combat account sharing. Yesterday they announced that several Latin American countries are part of a test where users must pay an additional fee for each house where they share their password. The idea, obviously, was not received positively.