With its ad-supporting plan set to make its debut in early 2023, Netflix is now looking into a price point for its streaming platform’s upcoming option.
Variety reports that Netflix is now looking into pricing the new ad support option on its streaming service for as low as $7 per month. This is notably less than half of the platform’s standard two-stream HD package without ads, which is currently priced at $15.49 per month in the U.S.
The media outlet also shares that Netflix is considering pricing the ad-supporting plan at $7 to $9 per month. This will include an advertising load of four minutes per hour. This matches up with the streaming service’s competitor, Disney+. Which is launching its ad-supporting plans in December for $7.99 per month. The Disney+ plan will also include four-minute ad breaks per hour.
Netflix reportedly told Bloomberg that the rumors about its ad-supporting plan are “speculation” at this point. The streaming service has notably not finalized any decisions about pricing or other details concerning the ad plan. “We are still in the early days of deciding how to launch a lower priced, ad-support tier and no decisions have been made.”
Variety reveals that, unlike its competitors, Netflix’s ad-supporting plan will not run ads in the kid’s programming or original movies. The streaming service is also rumored to not have ads in the downloads for offline viewing. It may also not have the ability to skip through ads. However, the company notably told Bloomberg that is “purely speculative” at this point.
Netflix’s ad-supporting plan was revealed to investors in the second-quarter earnings report. The plan was sad to be available “in a handful of markets where advertising spending is significant.” This will presumably include the U.S. and will appear on the platform in early 2023.
Netflix May See Ad Revenue Go From $150 million in 2023 to $1.8 Billion in 2025
Meanwhile, Variety reports that in a recent report from Wall Street analyst firm MoffettNathanson, Netflix may see ad revenue go from $150 million in 2023 to $1.8 billion in 2025. The company is considered to be a leading share among online services. This is in terms of time spent viewing in the U.S. This position can “clearly” lead to some high projects of potential advertising revenues.
Michael Nathanson of MoffettNathanson shared details in the June 2022 research note. “We believe the company is already striking early deals with media companies,” the note states. “And we would expect Netflix should be able to sell advertising against the vast majority (80% estimate) of content on the service by 2025.”
COO and chief product officer Greg Peters, previously explained that Netflix believes the per-subscriber economics on the ad-supported plan will be the same as what it sees with traditional subscribers. He also seemed optimistic to say that it may possibly be better.