Netflix predicts new low-cost, ad-supported subscription option could add 40 million viewers

Netflix predicts that its new low-cost ad-supported subscription option could boost revenue and add 40 million additional viewers to its streaming site by the end of 2023.

The Los Gatos, California-based company and its ad partner Microsoft Corporation have spent the past few weeks meeting with ad buyers about their new strategy in hopes of closing some deals before the launch date slated for later this year. The Wall Street Journal reported.

Netflix has 220 million subscribers and has the largest audience in the streaming industry. Thought the company said it would remain ad-free, but the move comes because there is more competition in the market and a maturing US market.

The company will join rivals such as HBO Max and Disney+ that have or plan to launch ad-supported services.

Their prediction is that their cheaper ad-supported plan could bring in new users and increase revenue.

Netflix told ad executives it expects to have 4.4 million unique viewers worldwide by the end of the year, 1.1 million of them from the US, according to preliminary forecasts, the news channel reported.

The company estimated that number would grow to more than 40 million unique viewers by the third quarter of 2023, with 13.3 million from the US.

“We’re still in the early stages of deciding how to launch a lower-priced ad-supported tier and no decisions have been made yet,” a Netflix spokeswoman said in a statement.

In the June quarter, Netflix lost nearly a million subscribers. A letter was sent to shareholders in July that the new ad-supported option would begin in early 2023, but some ad buyers were told it would launch on November 1.

The company plans to charge premium prices to advertise on its service, The Wall Street Journal previously reported.

Some companies that buy ads have been given the ratings so they can plan accordingly and advise their advertising customers on the expected reach of the new service, which would be a factor in determining the amount to spend.

Launch markets the company aims to appeal to, including advertisers in Japan, Brazil, Mexico, UK, France, Germany, Spain, Italy, Korea, Australia and Canada.

The popular South Korean survival TV series ‘Squid Games’, the historical drama TV series ‘The Crown’ and the American sci-fi horror drama series ‘Stranger Things’ are some of the shows Netflix is ​​betting on. in new viewers, as part of the cheaper ad-supported plan.

The stat that Netflix shared, “projected unique viewers,” is expected to exceed the number of subscribers to its ad-supported Netflix plan, as the company says more than one person in a subscribed household will likely be able to view the service, the news outlet reported.

In the meantime, the company said it is continuing to evaluate potential demand for its new ad-supported plan, with some ad buyers already claiming the ad demand expected to be part of the launch is “robust.”