Netflix plans to introduce 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 has a winner.
In a recent Insider survey (opens in a new tab), 28% of HBO Max subscribers said they were currently signed up for the platform's ad-supported subscription tier, even though the cheapest version of the streamer was only released last June. year.
For $9,99 (about $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). .1080 per month), but without the ability to download content for offline viewing or streaming in higher quality than XNUMXp.
The Insider study surveyed 1600 adults in the United States, so its results are far from conclusive. However, that startling 28% figure is likely indicative of national trends, corroborating a growing industry sentiment that streaming service subscribers are ready and willing to switch to cheaper, funded subscription levels. for income.
The data will be a welcome respite for Netflix and its executives, who are crafting their own ad-supported subscription tier in a bid to mitigate the streaming service's recent subscriber losses.
"We've left a large segment of customers off the table, which are the people who say, 'Hey, Netflix is too expensive for me and I don't care about the advertising,'" the Netflix co-author recently admitted. Chief Executive Sarandos asked about the company's decision to adopt ads, having previously been against the idea: “We're adding a layer of advertising; we don't add ads to Netflix as you know today. We're adding a level of advertising for people who say 'hey, I want a lower price and I'll see the ads.' »
As with HBO Max, Netflix plans to introduce this ad-supported tier for customers who would be willing to pay a lower monthly price at the expense of ad-free viewing. This level will be completely optional and ads will not start appearing on existing subscribers' Netflix accounts.
It's not yet clear how much Netflix's ad-supported subscription tier might cost, or what parameters this more affordable plan might place on content availability, though HBO's model offers a useful plan (for potential customers, as well as for Netflix). .
We also don't know when this new Netflix tier will be released. Co-CEO Reed Hastings has suggested there is a chance the year is over, telling investors the company is "trying to figure it out over the next year or two" but no concrete details have yet been announced.
We'll share more details as we get them, but in the meantime, read our breakdown of why we think optional ads are really good for the health of Netflix and its content offering.