Netflix has revealed its plans to offer a reduced-cost version of the popular streaming service at a time when consumers are more reluctant to spend money.
Netflix has mentioned the idea of adding advertisements to the streaming service to combat one account being shared with numerous people. The company has now stated that it will offer a second, less expensive, subscription option for $6.99 that will include ads. Netflix has stated that it will be doing this in order to obtain more secure revenue in a time of economic uncertainty.
The alternate subscription will be available in November and be provided throughout 12 countries. Interestingly, the decision to implement advertisements will force the company to reveal user metrics. Netflix has for some time been struggling to meet and maintain high user volume which has significantly reduced investor sentiment.
The cost of putting an ad on the platform could be as high as $60 per 1,000 viewers, and Morgan Stanley estimates that the company could generate $3 billion a year in revenue from advertisements by the year 2026.
Source: Financial Times