Cheaper Netflix Tier With Ads Launching Soon
Netflix's ad-supported tier will launch in November 2022, according to multiple reports. In the U.S., subscribers will be able to lower their monthly bill to $6.99 by accepting some ads during programming. The streaming giant is teaming with Microsoft to bring the ads to users, hopefully maximizing the experience by using algorithms to bring relevant ads in the same way Netflix tries to do with movies themselves. According to CNBC, the tier will include an average of four to five minutes of commercials each hour and won't give users the ability to download movies and TV series. A limited number of TV series and movies will initially be unavailable due to licensing restrictions, and the ads will run for 15 or 30 seconds in length and play before and during content.
The plan was announced back in April, after years of Microsoft rejecting the idea. The streamer has been hard hit by stock losses this year, and a lot of the subscribers leaving the platform cited repeated price hikes.
Outside of establishing corporate goals to bring consumers more choices and advertisers greater bang for their buck, it sounds like Netflix and Microsoft have not got many concrete ideas yet. Microsoft has access to a ton of advertiser data, gleaned through internet browsers, Skype, and various other products, as well as one of the most sought-after marketplaces in the streaming market.
"At launch, consumers will have more options to access Netflix's award-winning content," Microsoft said in a statement when the partnership was announced. "Marketers looking to Microsoft for their advertising needs will have access to the Netflix audience and premium connected TV inventory. Today's announcement also endorses Microsoft's approach to privacy, which is built on protecting customers' information."
Microsoft has some experience working with cloud-based entertainment, since the Xbox servers do a lot of heavy lifting, even though owning consoles and downloading or purchasing games is still the norm on that side of the industry. Recently, Microsoft assured fans that while cloud gaming is convenient, there are no plans to phase out consoles anytime soon.
"Some people are always going to love playing on consoles, having a console in their living room to download and have that experience," Microsoft's senior global product manager at Xbox Game Pass Pav Bhardwaj recently said in an interview. "I love consoles--this is just another route, another option to open up gaming to other people. It's not that one is a detriment to the other, this is more of a rising tide, and it's a really good place to be in to offer all these different opportunities. There's still PC, and there'll be new form factors that come out in future."
