Netflix to launch a cheaper service in Australia after losing subscribers

Netflix is ​​rolling out a cheaper service in Australia and 11 other countries after losing millions of subscribers in the first half of the year.

The “Basic with Ads” option costs $6.99, which is four dollars less than the streaming giant’s regular basic plan.

But the new service, which launches on November 3, will force subscribers to endure about four to five minutes of advertising per hour.

Users will not be able to download any content and there will also be a ‘limited’ number of movies and TV shows not available on the plan due to licensing restrictions.

Netflix’s ‘Basic with Ads’ option is also slated to roll out in the US, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, and the UK.

The streaming giant lost a staggering 1.2 million subscribers internationally in the first half of 2022 to June, with 220.7 million paying subscribers at the end of the month.

This included losses of 200,000 during the first three months of the year and 970,000 from April to June.

It was the first time Netflix reported a drop in customer base since it was first introduced 15 years ago.

The significant loss of customers caused the streaming platform to bring out an ad-supported tier that was cheaper than all the other plans.

Industry insiders suspected that Netflix would also have wanted to introduce ads before streaming rival Disney+ releases its own ad-supported tier on December 8.

In July, Netflix announced that it had lost almost 1 million subscribers in the second quarter of the year – nearly five times the amount lost in the first quarter.

The company expects to add one million new customers when it releases its third-quarter results next week.

The cheaper service will launch in Australia on November 3. It will be $4 less than the platform’s current base package (stock image)

Netflix reported a loss of 1.2 million customers in the first half of 2022. It was the streaming service’s first time reporting a decline in subscribers

Netflix currently has three subscription tiers — Basic, Standard, and Premium — none of which have ads.

At $6.99 per month, Basic with Ads is $4 cheaper than the Ads-free Basic plan, which costs $10.99 per month, and $16 cheaper than the Premium plan in Australia.

With the new plan, there will be ads lasting about 15 or 30 seconds each, according to Netflix.

Some ads are played before content is streamed on the platform, while others may interrupt programs playing on the screen.

A ‘limited number’ of movies and TV shows will also not be available on the new subscription due to licensing restrictions.

Netflix originally said it would launch ads in 2023, but it brought up the launch date, reportedly due to the loss of subscribers.

The platform said ads will be tailored to each country and genre of movie or show to “help advertisers reach the right audience.”

Netflix originally wanted to introduce ads in 2023, but brought up a cheaper ad-based option due to the loss of subscribers (stock image)

The news came after Netflix’s devastating first half, in which the company lost a record number of customers.

Netflix’s decision in early March to suspend the service in Russia after it invaded Ukraine resulted in the loss of 700,000 members alone.

The company’s stock price had also taken a hit in recent times, wiping out more than $200 billion (AUD$317 billion) in shareholder equity in the past 11 months.

Netflix hopes their new, low-cost option will be popular as cost-of-living pressures force users to cut spending or entice new subscribers to choose an affordable plan.

Other streaming platforms like Disney+ and Apple will soon be introducing cheaper plans with ads as well.