Netflix’s next ad-supported plan could cost between $7 and $9 per month according to a Bloomberg report released over the weekend. For comparison, the streaming service offers a basic single-screen plan in the US for $9.99 per month, while its most popular plan, which offers Full HD streaming on two screens, costs $15. $99 per month.
The Bloomberg report noted that Netflix plans to air approximately four minutes of commercials for every hour of programming, which is equal to or less than its competitors. He also said the company may run ads before and during a show, but won’t show anything after an episode ends.
In April, the streaming giant announced plans to roll out its ad-supported plan next year. But since then, several reports have pointed out that the company could launch this plan by the end of the year. The new report indicates that Netflix could launch its ad-powered tier in at least half a dozen markets in the last quarter of the calendar year.
During its recent earnings call, Netflix confirmed that users subscribing to the ad-supported plan won’t have access to its entire catalog initially – this could be due to its licensing agreement with various studios. Recent reports also revealed that Netflix may now allow offline viewing in its next plan.
Additionally, a Bloomberg report last week suggested that Netflix may not run ads on children’s content, even on the ad-supported plan. The report noted that the company may initially refrain from running ads on its original movie lineup.
The streaming giant has tried to attract more users by experimenting with cheaper plans, such as mobile plans only available in India, Malaysia, Nigeria, Kenya and South Africa. However, the ad-supported plan might become available worldwide after its launch. Estimates suggest that ads on Netflix will generate $8.5 billion in revenue by 2027. A study published by Digital TV Research in May suggests that the global ad-supported video-on-demand (AVOD) market will reach $70 billion by 2027, with the United States generating $31 billion.
Netflix isn’t the only streaming service looking to build on an ad-supported plan to expand its user base. In March, Disney+ confirmed that it plans to introduce a similar tier by the end of the year. Earlier this month, the company confirmed to launch for December with a price of $7.99 per month. During its second quarter 2022 earnings call, Warner Bros. Discovery also said it was exploring an ad-fueled plan for the new service – due to launch in 2023 – created by the merger of HBO Max and Discovery+.