The battle for consumers' money for streaming platforms continues to heat up and several ad-supported lower-priced plans could increase the market dynamics even more.
Here’s a look at how the prices of several top streaming platforms stack up and when consumers can pay for a cheaper Netflix Inc (NASDAQ:NFLX) and Disney+ plan.
What Happened: The launch of a highly anticipated ad-supported plan from Netflix has a release date and price.
Netflix announced it will launch its Basic with Ads platform in the U.S. and 11 other countries beginning on Nov. 3, 2022.
The plan will be available in the U.S. for $6.99 per month. The additional countries available at launch are Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain and the U.K.
The ad-supported plans will come with video quality of 720p/HD compared to 1080p for the Standard plan. Downloads of content will not be offered on the new ad-supported plan.
A total of four to five minutes of ads will run per hour on Netflix content on the new Basic with Ads plans. The new ad-supported plan will not include all titles either. Ads will be 15 to 30 seconds in length and play before and during shows and films.
“A limited number of movies and TV shows won’t be available due to licensing restrictions, which we’re working on,” the company said.
Netflix said Basic with Ads has everything people love about Netflix “at a lower price, with a few ads in-between.”
The streaming company credited its partnership with Microsoft Corporation (NASDAQ:MSFT) on advertisements for being quick and launching six months after it was announced.
“We’re confident that with Netflix starting at $6.99 a month, we now have a price and plan for every fan.”
Related Link: Netflix Q2 Earnings Highlights: Stock Climbs On Subscriber Beat, Guidance, Ad-Supported Update
How Netflix Stacks Up: Here’s a look at how the new Netflix prices stack up to the competition in the streaming platform race. Included are prices from rivals Walt Disney Co (NYSE:DIS); Hulu; HBO Max, a unit of Warner Bros. Discovery Inc (NASDAQ:WBD); Paramount+, a unit of Paramount Global (NASDAQ:PARA)(NASDAQ:PARAA); Peacock, a unit of Comcast Corporation (NASDAQ:CMCSA); Apple Inc (NASDAQ:AAPL) and Amazon.com, Inc. (NASDAQ:AMZN).
- Netflix with ads: $6.99 per month
- Netflix Basic without ads: $9.99 per month
- Netflix Standard without ads: $15.49 per month
- Disney+ with ads (starts Dec. 8): $7.99 per month
- Disney+ without ads: $10.99 per month
- Hulu with ads: $7.99 per month
- Hulu without ads: $14.99 per month
- Disney+ and Hulu with ads: $9.99 per month
- Disney+ without ads and Hulu without ads: $19.99 per month
- HBO Max with ads: $9.99 per month
- HBO Max without ads: $14.99 per month
- Paramount+ with ads: $4.99 per month
- Paramount+ without ads: $9.99 per month
- Peacock with ads: $4.99 per month
- Peacock without ads: $9.99 per month
- AppleTV+: $4.99 per month
- Amazon Prime (full benefits): $14.99 per month
- Amazon Prime Video (streaming only): $8.99 per month
Why It’s Important: Netflix’s new ad-supported plan comes in cheaper than its main rivals Disney+ and Hulu. The ad-supported plan from Netflix is less expensive than HBO Max, which has been a strong performer for streaming and could continue with the success of “House of the Dragon.” With a November release date, Netflix also beats Disney to the launch of its ad-supported plan.
Netflix comes in slightly higher than offerings from Paramount and Peacock, which have been two of the smaller streaming platforms.
With the benefit of not having ads and having higher-quality video, the standard plan from Netflix could remain a staple in the streaming market.
A big question will be if Netflix gains overall subscribers and lowers churn, or sees its existing subscribers trading down for a less expensive plan in a period of high inflation and rising costs.
Netflix ended the second quarter with 220.67 million subscribers. The company expected to add one million subscribers in the third quarter.
Netflix will report third-quarter financial results after market close on Oct. 18. Analysts expect the company to report earnings per share of $2.13 and revenue of $7.84 billion in the third quarter, according to data from Benzinga Pro.
NFLX Price Action: Netflix shares were up 5.27% to $232.51 on Thursday at market close.
Related Link: Ad-Supported Plan From Netflix Not Priced Into Stock: 'Can Drive A Material Reacceleration In Revenue Growth'
