NETFLIX could launch a new version of its app with advertisements later this year.
A leaked company memo hints that a “cheaper” tier will be available as soon as October.
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Earlier this year, Netflix confirmed it was considering plans to create a cheap new Netflix membership within the next couple of years.
This would be possible by showing ads (for the first time ever) to viewers.
The Sun revealed how the plan could cost as little as £5.49/$7.99 a month.
Now a leaked Netflix memo seen by The New York Times reveals the plans have been accelerated – with hopes of going live in October this year.
“It’s fast and ambitious and it will require some trade-offs,” the Netflix note reads.
Rival services are already offering similar plans.
US Netflix competitor HBO Max charges customers $15 a month – or $10 with ads.
Netflix lost subscribers more subscribers than it gained for the first time in a decade earlier this year, so it’s now under pressure to hook more viewers.
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“Every major streaming company excluding Apple has or has announced an ad-supported service,” Netflix is quoted as saying.
“For good reason, people want lower-priced options.”
Netflix has already revealed plans to crack down on users sharing accounts.
It estimates that 100million homes are sharing subscriptions – a huge chunk of its 222million membership base.
Netflix has already begun testing charges in some areas.
And it’s left fans raging, with some viewers vowing to cancel their memberships completely.
The “Standard” Netflix plan currently costs £10.99 a month in the UK and $15.49 in the US.
But industry insiders speaking to The Sun last month say they predict a cheaper plan could cost 50% less.
“Undoubtedly it has to be low enough to attract users to sign up and keep them engaged,” said Paolo Pescatore, an expert media analyst at PP Foresight.
“Therefore, somewhere between 25% to 50% less than what they’re paying today.
Paolo told The Sun: “It remains to be seen whether it will be rolled across all current tiers, or this becomes the basic cheapest tier as a means to get folks signed up.
“Then if they want a premium experience, they can pay more for that.”
We also spoke to industry analyst titan Michael Pachter, who agreed that a halved fee was on the cards.
“Most services that offer ad support charge half, so $7.99 is likely,” said Pachter, of Wedbush Securities, speaking to The Sun.
“But Netflix may advertise a tad less and charge a tad more.
“So I would guess between $7.99 to $9.99.”
He added: “With four 2minute ad breaks – one pre-roll, and three more at the 12, 24, 36 minute marks.”
A third insider – Tammy Parker of GlobalData – thought Netflix could drop to around $10 a month in the US, courtesy of a $5 discount.
“HBO Max offers a $5 monthly discount for its ad-supported version,” Tammy told The Sun.
“So I would imagine that Netflix would follow suit with that type of discount if it goes forward with an advertising-supported tier.”
But the tech analyst added that Netflix might try to make its ads “less intrusive than they are on other services”.
Netflix doesn’t currently show ads before, during or after TV shows or movies.
But the price has steadily climbed over the years, with the top plan now costing £15.99 / $19.99.
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This post first appeared on Thesun.co.uk
