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Netflix will roll out a subscription option subsidised by advertisements in November in a dozen countries as it looks to boost revenues and acquire more users.
Called ‘basic with ads’, the subscription will be priced at $6.99 in the United States, three dollars less than a basic option without ads in that country.
The move comes as the streaming giant battles a subscriber churn after it lost nearly a million subscribers during the three-month period ending June 30, marking the biggest ever quarterly fall in subscribers.
The ad-supported subscription, a first for Netflix, will roll out in Australia, Brazil, Britain, Canada, France, Germany, Italy, Japan, South Korea, Mexico, Spain and the United States. It is a big change for the company, which pioneered the idea of ad-free subscription-based streaming.
What would be different in the ad-discounted version?
Apart from having, for the first time, third-party ads on its platform, the subscription plan will have its video quality capped to 720p while having an average of four to five minutes of ads per hour.
Netflix said that a “limited” number of shows will not be available in this particular tier due to licensing restrictions which the company is “working on” to sort out. Users will also not be able to download titles.
At launch, ads will be 15 or 30 seconds in length, which will play before and during shows and films.
When will this option be available in India?
India is not one of the 12 countries where Netflix is first launching the ad-supported plan, although the company has said that it expects to roll out the service in more countries over time.
“While it’s still very early days, we’re pleased with the interest from both consumers and the advertising community — and couldn’t be more excited about what’s ahead. As we learn from and improve the experience, we expect to launch in more countries over time,” it said in a statement.
However, it is worth noting that Netflix has some of the cheapest subscription plans compared to its services in other geographies. The impact on the existing subscription prices — as and when it launches the ad-version plan in the country — is yet unclear, especially given the price-sensitive nature of the Indian market.
Looking at the US pricing, how expensive does the plan look?
The rupee has been weakening against the dollar, and the dollar was around Rs 82 on October 14. At that conversion rate, Netflix’s ad-supported plan in the US at $6.99 comes to be around Rs 575.
This is significantly more expensive than the streaming platform’s ‘standard’ plan in India, which costs Rs 499 per month. This plan supports simultaneous streaming of high-definition content on two devices, and has no ads.
In India, Netflix plans start from Rs 149, which is less than $2 per month. But that is a mobile-only plan. For other devices like smart televisions, the cheapest Netflix plan in India starts from Rs 199 per month — or about $2.40 per month at current exchange rates.
