Netflix predicts that its new low-cost, ad-supported subscription option could boost revenue and add an additional 40 million viewers to its streaming site by the end of 2023.
The Los Gatos California-based company and its advertising partner Microsoft Corporation have met with ad buyers over the last few weeks on its new strategy in hopes of securing some deals ahead of its launch date slated for later this year, The Wall Street Journal reported.
Netflix that has a 220 million subscribers and has the streaming industry’s largest audience. Thought the company said it would remain ad-free but the move comes as there is more competition in the market space and a maturing US market.
The company will join rivals such as HBO Max and Disney+ that have or are planning to launch ad-supported services.
Their prediction is that their lower-cost, ad-supported plan could bring in new users and boost earnings.
Netflix predicts that its new low-cost, ad-supported subscription option could boost revenue and add an additional 40 million viewers to its streaming site by the end of 2023
The popular South Korean survival television series, ‘Squid Games,’ is one of the shows Netflix is betting would bring in new viewers as part of its lower-cost, ad-supported plan
Claire Foy (pictured) stars in ‘The Crown’ the historical drama television series about the reign of Queen Elizabeth II, is among some of the popular content on the streaming site
Millie Bobby Brown as Eleven in the American sci-fi horror drama thriller ‘Stranger Things’
Netflix told ad executives that it expects to have 4.4 million unique viewers worldwide at the end of the year, with 1.1 million coming from the U.S, according to preliminary projections, the news outlet reported.
The company estimated that number would grow to over 40 million unique viewers by the third quarter of 2023, with 13.3 million from the US.
‘We are still in the early days of deciding how to launch a lower priced, ad supported tier and no decisions have been made,’ a Netflix spokeswoman said in a statement.
In the June quarter, Netflix lost nearly one million subscribers. In July, a letter was sent out to shareholders that new ad-supported option would begin in early 2023, but some ad buyers were told it would launch November 1.
The company plans to charge premium prices to advertise on its service, The Wall Street Journal previously reported.
Some ad-buying companies were given the viewership projections, so they can plan accordingly and advise their advertising clients on the projected reach of the new service, which would be a factor in determining the amount of dollars to spend.
Launch markets that the company plans to appeal to include advertisers in Japan, Brazil, Mexico, the U.K., France, Germany, Spain, Italy, Korea, Australia and Canada.
The popular South Korean survival television series, ‘Squid Games,’ the historical drama television series, ‘The Crown,’ and the American sci-fi horror drama series, ‘Stranger Things’ are some of the shows Netflix is betting on that would bring in new viewers, as part of its lower-cost, ad supported plan.
The metric Netflix has shared, ‘projected unique viewers,’ is expected to be higher than the number of subscribers for the advertising-supported Netflix plan, since the company says more than one person in a subscribing household will likely be able to watch the service, the news outlet reported.
In the interim, the company said that it continues to evaluate the potential demand for their new ad-supported plan with some ad buyers already claiming that advertising demand expected to be part of the launch is ‘robust.’