Netflix has revealed it will be introducing adverts to the streaming service and says consumer choice is behind the decision.
The streaming service uses a pay-monthly subscription to keep the platform advertisement free but after raising prices this month, says adverts will also be added to the platform for some users. It says a new lower price subscription will be offered to customers who want lower prices but do not mind adverts on films and TV series, according to the New York Times.
It comes as Netflix CEO Reed Hastings explained to employees how some customers want adverts if it means they will get a lower price for the streaming service. Reed Hastings said last month that the company was looking to bring in an advertiser-supported cheaper streaming service within the next couple of years.
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However, the number of people leaving the service appears to have caused Netflix to rush the launch of the cheaper subscription. A note sent to employees said: “Yes, it's fast and ambitious and it will require some trade-offs.
“Every major streaming company excluding Apple has announced an ad-supported service. For good reason, people want lower-priced options.”
The executives pointed out that HBO and Hulu have been able to “maintain strong brands while offering an ad-supported service.” However, the new ad-supported service is not likely to arrive this year and could take even longer as the platform looks at its options.
The news comes after Netflix lost more than 200,000 subscribers in 2022 and amid worries more will leave the platform after prices for basic and standard plans have increased by £1 per month to £6.99 and £10.00 respectively, and the premium subscription increased by £2 to £15.99.
Rival platforms including Disney+ has also raised prices and the Disney-owned service has also announced advert-supported subscriptions. Amazon meanwhile, already offers a free service with adverts called Freevee after rebranding the former IMDB streaming service.
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