Netflix reveals launch of new $7 a month ‘Basic with Ads’ subscription

Netflix has announced its launch date for a new ad-supported basic plan.

Basic with Ads will cost $6.99 per month in Australia starting November 4th.

As outlined in a press release distributed today, it will stream with an average of four to five minutes of ads per hour which users will be unable to skip.

Ads will be 15 or 30 seconds in length, targeted towards specific audiences, and will play before and during shows and movies.

In addition, some movies and TV shows won’t be available on the cheaper subscription due to licensing restrictions.

“To help advertisers reach the right audience and ensure our ads are more relevant for consumers, we’ll offer broad targeting capabilities by country and genre (e.g. action, drama, romance, sci-fi),” the statement outlined.

“Advertisers will also be able to prevent their ads from appearing on content that might be inconsistent with their brand (e.g. sex, nudity or graphic violence)”.

The news comes after reports in September that the new service was expected to cost $8 per month.

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Discussions with Australian advertisers and media buyers began earlier this year, with Netflix appointing Microsoft as its global advertising partner.

In September, the Sydney Morning Herald reported that only national advertisers have been offered spots, and it will not be available to brands advertising gambling or cryptocurrency products, nor will it carry political messages.

The current Netflix pricing tiers are $10.99 for a basic subscription, $16.99 for a standard one and $22.99 for a premium membership. The difference in tiers relates to the number of simultaneous streams, the number of devices which you can download onto and high-definition streaming.

Customers who opt to stay on their existing membership plans will not be subjected to any advertising.

Netflix surprised the market and its customer base when in April co-founder and co-chief executive Reed Hastings said the streamer was going to add an ad-supported option to its platform. Netflix had previously been vehemently against the move, arguing that its customers were looking for an ad-free environment.

In his about-face, Hastings said, “Those who have followed Netflix know that I have been against the complexity of advertising, and a big fan of simplicity of subscription.

“But as much as I am a fan of that, I am a bigger fan of consumer choice. And allowing consumers who would like to have a lower price, and are advertising-tolerant, get what they want, makes a lot of sense.”

Netflix’s move comes off the heels of the platform losing subscribers and being challenged for additional revenue streams. It has also seen its market value drop by tens of billions of dollars as its stock price took a hammering.

Netflix won’t be the only mainstream streaming service to introduce an ad-supported subscription option soon.

Disney will do the same from 2023, revealing the cost as $US7.99 for American customers. It hasn’t confirmed an Australian price.

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