With the multiplication of streaming services, giant Netflix has seen its competition increase tenfold in only a few years. Because of the amount of subscribers migratiing to new streaming services such as Prime Video, Disney+ and OCS, the streaming pioneer has had to reassess its approach and is now announing a new, more affordable subscription plan with ads.
Netflix co-CEO Ted Sarandos confirmed that the company would begin testing a cheaper, ad-supported streaming tier. The streaming company is in talks with several potential partners to facilitate its entry into the advertising world. While no date has yet been announced for the arrival of this new subscription option, Netflix is keen to reassure its subscribers and guarantees that no advertising will be added to current subscription plans.
Ted Sarandos also revealed that the presence of ads means that contracts with some production studios will have to be renegotiated, resulting in a smaller catalog compared to other tiers. While Netflix guarantees that the vast majority of content will remain available, some movies and series will be absent from this offer.
Netflix won’t be the only streaming service to adopt an ad-supported option, however. Disney+ also announced its decision to add a more affordable ad-supported subscription tier. The new offer will be available in the U.S. starting in late 2022 with plans to expand internationally in 2023. Kareem Daniel, president of Disney Media and Entertainment Distribution, said the decision was made “so that more consumers [puissent] access our incredible content. Advertisers will be able to reach a wider audience, and our content creators will be able to share their incredible work with more fans and families.”
With the decision of these two streaming giants, we may well see a new trend of offering ad-supported subscriptions for all video-on-demand platforms.