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Netflix mulls early release date for ad-supported tier

The move would help Netflix get ahead of Disney Plus, which is working on its own ad-supported variant.

The move would help Netflix get ahead of Disney Plus, which is working on its own ad-supported variant.

The Netflix startup screen appears on a laptop computer. (Photo by Jade87 via Pixabay/Graphic by The Desk)

Netflix is weighing the possibility of launching an ad-supported version of its streaming service as early as November, according to a new report.

The move would accelerate plans for the ad-supported version of Netflix and is likely intended to help the streamer get ahead of the Walt Disney Company, which is planning to release an ad-supported version of its Disney Plus service in December.

The new date was published in a report by the Wall Street Journal on Wednesday. On Thursday, a Netflix spokesperson told other media outlets that the company was still “in the early days of deciding how to launch a lower-priced, ad-supported tier” and that “no decisions have been made” as to its launch date.

After years of raising its subscription fees on consumers, Netflix has been under pressure in recent months to offer a cheaper variant of its streaming service after the company reported two consecutive financial quarters of subscriber losses. In April, the company said it lost 200,000 more subscribers than it gained during that financial quarter; the number jumped to over 970,000 by the end of June.

Earlier this year, Netflix executives affirmed they were in the early stages of developing an ad-supported tier that is expected to offer most movies and TV shows available in the commercial-free version, but at a lower price. In July, the company said the ad-supported version will use technology powered by Microsoft under a strategic partnership between the two companies.

Initially, Netflix executives said the ad-supported version of the streaming service was targeted to launch in early 2023. But some sales executives have told ad buyers that the company has moved up the launch date to November 1, according to the Journal. The company is also hoping to charge advertisers as much as $65 per 1,000 impressions, the Journal said.

Another report published by Bloomberg last week said Netflix was considering a price of $7 a month to $9 a month for its ad-supported plan, with content interrupted by as much as four minutes of commercials per hour, noting that the ad-supported plan could debut in around 6 countries by the end of the year. A Netflix spokesperson later downplayed the Bloomberg report, calling it “speculation.”

If the Bloomberg report turns out to be correct, the ad-supported tier would cost roughly as much as the cheapest version of Netflix today. Currently, Netflix has three tiers of service: A basic package that allows streamers to watch content in standard definition for $10 a month, a standard package allowing two simultaneous streams of high-definition content for $15.50 a month, and a premium tier that allows four simultaneous streams of ultra-high definition (UHD/4K) content for $20 a month.

Netflix is also still in the DVD-by-mail game, with customers paying $10 a month to rent one DVD or Blu-ray disc at any given time. For $15 a month, customers can rent two DVDs or Blu-Ray discs at a time; the number increases to three discs for $20 a month.

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About the Author:

Matthew Keys

Matthew Keys is the publisher of The Desk and reports on the business and policy matters involving the broadcast television, streaming video and radio industries. He previously worked for Thomson Reuters, Disney-ABC, Tribune Broadcasting and McNaughton Newspapers. Matthew is based in Northern California, has won numerous awards in the field of journalism, and is a member of IRE (Investigative Reporters and Editors).