Netflix plans on introducing a cheaper, ad-supported subscription tier in the near future – and if the success of HBO’s equivalent tier is anything to go by, the streamer is onto a winner.
In a recent survey conducted by Insider (opens in new tab), 28% of HBO Max-subscribing respondents said they are currently signed up to the platform’s ad-supported subscription tier – despite the cheaper version of the streamer having only launched in June last year.
For $9.99 (around £8 / AU$14) per month, subscribers to the ad-supported version of HBO Max can access the same library of movies and TV shows as those on the standard tier (which costs $14.99 per month), albeit without the ability to download content for offline viewing or stream it in higher quality than 1080p.
Insider’s study surveyed 1,600 adults in the US, so its findings are far from conclusive. However, that surprising 28% figure is likely to be indicative of nationwide trends, corroborating a growing industry feeling that streaming service subscribers are ready and willing to embrace cheaper, ad-supported subscription tiers if given the opportunity to do so.
The data will come as a welcome reprieve for Netflix and its executives, who are currently formulating their own ad-supported subscription tier in a bid to mitigate the streaming service’s recent subscriber losses.
“We’ve left a big customer segment off the table, which is people who say: ‘hey, Netflix is too expensive for me and I don’t mind advertising,” Netflix co-CEO Sarandos recently admitted when asked about the company’s decision to embrace ads, having previously been against the idea. “We’re adding an ad-tier; we’re not adding ads to Netflix as you know it today. We’re adding an ad tier for folks who say ‘hey, I want a lower price and I’ll watch ads.’”
As with HBO Max, then, Netflix plans on introducing this ad-supported tier for customers who would be willing to pay a lower monthly price at the expense of ad-free viewing. This tier will be entirely optional, and ads won’t start appearing on existing subscribers’ Netflix accounts.
It’s not yet clear how much Netflix’s ad-supported subscription tier might cost, nor the parameters this more affordable package could place on the availability of content, though HBO’s model provides a useful blueprint (for prospective customers, as well as Netflix itself).
We’re also in the dark about when this new Netflix tier is set to launch. Co-CEO Reed Hastings has suggested that a year-end arrival is a possibility, telling investors that the company is “trying to figure it out over the next year or two,” but no concrete details have been offered up as yet.
We’ll share more details as and when we get them, but in the meantime, read our breakdown of why we think optional ads are actually a great thing for the health of Netflix and its content offering.
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