Internet users have reacted to Netflix’s decision to launch its advertising-supported streaming plan dubbed “Basic with Ads” on Thursday at $7 a month.
The new subscription tier costs $6.99 per month, $3 cheaper than Netflix’s $9.99 most Basic plan and is set to include 4 to 5 minutes of ads per hour. The plan also comes with some limitations as viewers won’t be able to download shows for later viewing, Netflix said.
The company also stated that a “limited number” of movies and TV episodes would not be accessible on the ad-supported tier, blaming licensing limitations and stating that it was “working on” the problem.
The platform recently increased its number of paid subscribers by 2.41 million in the third quarter of the year, which may be considered a massive win for the U.S. streaming giant, which lost over a million subscribers in the first and second quarters.
The program will begin one month before Disney +, a competitor streaming service, introduces its ad-supported streaming tier, going up against other ad-supported platforms like Hulu and Peacock.
We think it is a revenue move by Netflix.
Though Netflix prides itself as the pioneer in the streaming service space, the company faces a huge threat from competitors such as Amazon Prime Video, Disney+, HBO/HBO Max and Hulu. They are ramping up their subscribers and giving Netflix a run for its money.
Recently, Disney+ overtook Netflix in total subscribers after its total subscriptions reached 152.1 million at the end of Q2, exceeding the 147 million mark predicted by analysts. The company also added 14.4 million Disney+ customers, beating the expected 10 million additions in July.
Now, the company has a total of 221 million subscribers- combined with Hulu and ESPN+ (Hulu has 46.2 million subscribers and ESPN+, has 22.8 million).
On the other hand, according to a report by Technext, Netflix’s stock price dropped by 35 per cent (%) in April, erasing $50 billion from the company’s value. Earlier, Netflix’s total revenue for the first quarter of 2022 increased nearly 10% to $7.87 billion, falling short of analysts’ expectations of $7.93 billion.
In its October 18 earnings letter to shareholders, Netflix disclosed that it managed to double its growth projections, bringing its total number of users to 223 million.
That feat may not be unconnected to the company’s decision to introduce the lower-priced ad-supported subscription plan for consumers in partnership with Microsoft.
The new subscription tier launch is also coming when Netflix is preparing to crack down on password sharing on its platform. Next year, Netflix will require users who borrow accounts to create their own. Additionally, users who share passwords can pay an additional fee to add friends and family to their accounts.
Reactions have started trailing the launch of the new subscription plan. Some netizens believe that this development would help the streaming platform increase the number of subscribers.
Some internet users have expressed dissatisfaction that major platforms have begun to insert so many ads into their content lately, going back to the old TV age.
See another reaction
What’s different with the ‘Basic With Ads’ plan?
With 223 million customers, Netflix is still the most popular streaming service in the world, having reversed subscriber losses earlier in the year thanks to a midsummer sign-up boom.
However, Ads have never been a part of the 15-year-old streaming service until the business changed course six months ago following a turbulent start to 2022 that saw viewership decline.
Netflix is betting the lower-priced ad-based service will prove popular at a time when high inflation is pressuring millions of households to curb their spending. The company, which faces mounting competition from Amazon, Apple and Walt Disney Co., has also started adding video games to its lineup at no added cost.
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