A year has passed since Netflix, which had no ads, launched a subscription plan that includes advertisements. To celebrate the successful first year of its ad-supported plan, Netflix will update several new features.
On November 1st (local time), IT media outlet The Verge reported that various features will be added to Netflix’s ad-supported plan, such as removing ads or downloading content. It will also support enhanced 1080p resolution streaming on up to two devices. The update will be launched in various countries, including South Korea, Australia, Canada, France, and Germany.
Many Netflix users subscribe to the cheaper ad-supported plan instead of watching ads. Netflix aims to attract more subscribers by adding more features to the ad-supported plan, which has generated significant revenue.
The ‘Ad-supported Plan’ that Appeared on Netflix, which had no Ads
Existing Netflix subscription plan chart / CEO Score Daily
Netflix had long been an ad-free platform. The sudden outbreak of COVID-19 boosted the popularity of online video services (OTT) like Netflix. However, with the end of COVID-19, Netflix’s revenue significantly decreased. Last year, Bloomberg reported that the number of global Netflix subscribers in the first quarter of 2022 had been reduced by 200,000 compared to the fourth quarter of 2021.
To overcome operational losses, Netflix decided to attract users by launching a cheaper ad-supported plan. Netflix CEO Ted Sarandos said when launching the ad-supported plan, “If we lower the price, there will be more users willing to watch ads, and we should have considered these users earlier.”
Last year, Netflix launched an ‘Ad-supported Basic’ plan in some markets, including South Korea. Users had to watch an average of 4-5 minutes of ads per hour in exchange for watching content at the cheapest price among the plans. The ad-supported plan was available for $6.99 monthly, cheaper than the ad-free Basic, Standard, and Premium plans. The price difference is almost twice as much as the next highest Basic plan.
The ‘Ad-supported Plan’ Turns One…Netflix Aims to Increase Subscriptions
Since then, Netflix has achieved significant revenue by attracting many users with the ad-supported plan. The ad-supported plan made the most significant contribution to the quarterly increase in subscribers earlier this year. The number of subscribers reached approximately 15 million worldwide. The expanded crackdown on password sharing also boosted the influx of ad-supported plan users.
Now, Netflix plans to launch several updates to the ad-supported plan to attract more users. The updates include ▲removing ads after watching four or more consecutive episodes ▲streaming on two devices simultaneously at 1080p resolution ▲content download feature.
First, Netflix plans to significantly reduce the number of ads displayed for users who watch several episodes of specific content consecutively. If a user watches up to the third episode of content consecutively, ads will be removed from the fourth episode onwards. This allows ad-supported plan subscribers to enjoy content without interruption. This update is expected to be launched early next year.
Previously, content could be watched at 720p resolution when subscribing to the ad-supported plan. However, with the upcoming update, it is expected that simultaneous streaming at 1080p resolution will be possible on up to two devices.
Downloading favorite series or movies will also be possible. Ad-supported plan users can enjoy downloaded content in offline environments without Wi-Fi or data. Netflix emphasized that among similar platforms with ad-supported plans, it is the only one offering a download option. This feature is expected to be launched this weekend.
The ‘Ad-supported Plan’ Saw No ‘Price Increase’
In October, Netflix once again raised its subscription fee. The increase applied to Netflix subscriptions in the U.S. and the U.K. but not in South Korea. There were speculations that domestic subscription fees might also increase soon.
Netflix raised the prices of the Basic and Premium plans. The Basic plan, originally $9.99, increased by $2 to $11.99, and the Premium plan, which was $14.99, rose to $22.99. On the other hand, the prices of the Standard and ad-supported plans did not increase.
IT media outlet GameSpot viewed subscribing to the unraised ad-supported plan as the most attractive option for Netflix users. If domestic subscription fees also increase, subscribing to the ad-supported plan could be the best choice.
By. Choi Hyun Jung
Most Commented