Netflix announced that it intended to submit a fee in November, which would be paid for by advertising, and the cost of subscriptions for users would be $7 — a step designed to attract new clients to the platform after the company lost part of the audience in the first half of the year.
The price of "Base with Advertisement" is $3 less than the cheapest price without advertising. The new option will be available in 12 countries, including the US, Brazil, Germany, Japan and Korea. Netflix reports that subscribers will be shown approximately 4 to 5 minutes of advertising per hour, and in recent films advertising will be limited to maintain the positive impressions of viewing. However, there is bad news for subscribers. Some 5 to 10% of Netflix's repertoire will not be available on the new tariff due to licensing restrictions.
Netflix's shares rose by 5.4% to $232.86 in the current year as a whole, and it is known that Netflix's management has been strongly opposed to adding advertising to its content for years, but in April the company had to change its mind against the background of a drop in the number of subscribers and the expected further departure of the audience.
The company refused to publish forecasts of how many customers will sign the advertising plan and how many extra profits the service will receive. The fourth quarter of the service intends to publish once the earnings are reported next Tuesday. Experts recall that in the United States alone Netflix intends to receive 13.3 million advertising subscribers by the third quarter of 2023. Similar tariffs already have or intend to present competing services, the price already in place in the United States is $8-10.
Netflix, as of June, has an audience of 220.7 million people, 1.2 million less than the beginning of the year. A million more people are expected to be added in the third quarter. Netflix, sponsored by advertising, debuts in Canada and Mexico on 1 November, in the United States, Brazil, the United Kingdom, France, Italy, Germany, Australia, Korea and Japan on 3 November, and in Spain on 10 November.
Jeremy Gorman, the head of Netflix's advertising unit, stated that by launching the new tariff, the company had already sold almost all available advertising time, with interest ranging from car manufacturers to laxheri-brands.
Advertisers can use national advertising or content genre, display their ads in a dozen top-down shows. Advertisers will be provided with a side-by-side system for recording impressions from advertising and traffic, as well as other audience data.