Confirming rumors circulating since last month, Netflix CEO Reed Hastings has openly discussed the preparation of a new type of Netflix subscription, cheaper but with a significant disadvantage.
Netflix even experimented with a completely free “subscription” last year, offering limited access to content on the platform. But the offer to consumers in Kenya with very limited financial possibilities came rather as a demo version of Netflix services. This time we are talking about a cheaper subscription that does not limit access at all.
The method used successfully by rival platforms also involves sharing the costs incurred by users, who themselves become a product to be “sold” to advertising companies. We are talking, of course, about the introduction of advertising breaks.
Coming as a possible compromise solution to support the future price increases of the Netflix subscription, the offer is the acceptance of advertising breaks, introduced between the episodes of the favorite series. It is unknown at this time what he will do after leaving the post.
The possibility of introducing an advertising-subsidized tariff plan was first discussed by Netflix CFO Spencer Neumann at a March 8 investor conference. The change in attitude, which seems in flagrant contradiction with the positioning of the platform as a premium content service, comes after the announcement of the abrupt decrease in the number of subscribers. Although partly attributed to the forced existence of the Russian market, the news has created panic among investors who have massively sold the company’s shares.
Meanwhile, the competition has already implemented this strategy, with Disney + recently announcing its own subsidized pricing plan, offset by the display of advertisements. HBO rivals Max and Hulu also offer similar subscription options.