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The platform Netflix announced that it will launch an ad-subsidized subscription option in November in a dozen countries, including Brazil, Spain and Mexico, a move by the streaming service to fuel its growth.
In a statement, the company said the “Basic with Ads” plan will have between four and five minutes of ads per hour, and some series or movies will be temporarily unwatchable due to licensing restrictions.
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Previously, Ted Sarandos, co-CEO and director of Content at Netflix, announced the novelty within the framework of the Cannes Lions International Festival of Creativity at the end of June. “We are adding a level of publicity; we are not adding ads to Netflix as you know it today. We’re adding a level of ads for people who say, ‘Hey, I want a lower price and I’ll see ads.’”he pointed out at the time.
Likewise, Reed Hastings, another coCEO of the platform, had already indicated that they were thinking of including advertising. “It’s not a short-term fix, because once you start offering a lower-priced plan with ads as an option, some consumers take it. And we have a great installed base that is probably very happy where it is.”he claimed.
This new plan, being cheaper than the rest, hopes to have more reach with users who cannot pay for their other plans, but do want to access their catalog.
The change is drastic, because for many years Netflix had given up putting in such a plan. yesHowever, he has decided to express it, in part, thanks to the large drop in his investments.
When will Netflix’s “cheap plan” launch?
According to the company, the plan with announcements on November 3 in the United States and in eleven other countries.
The streaming platform is already testing two charging systems for sharing accounts in countries in the region. On the one hand, it has the “Add additional member” function, available for Peru, Chile and Costa Rica; on the other hand, as of August 22, the “Add a house” function will begin to apply, for Argentina, Honduras, Guatemala, El Salvador and the Dominican Republic.
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Netflix’s new service will come to compete with the Disney+ ad-supported plan, which launches on December 8.
How much does Netflix’s “cheap plan” cost?
The basic subscription with ads will be priced at $6.99 in the United States, three dollars less than the basic option without ads, according to Netflix COO Greg Peters in a briefing.
“The timing is great because we really are at a pivotal time in the entertainment industry and the evolution of that industry,” Peters said. “Now streaming has surpassed both broadcast and cable in total TV time in the United States.”
What countries will Netflix’s “cheap plan” reach?
The new Netflix option will roll out in Australia, Brazil, the UK, Canada, France, Germany, Italy, Japan, South Korea, Mexico, Spain, and the US.
Almost the entire catalog of the platform will be available, with some offers held until the license agreements are renegotiated.
The ads will last between 15 and 30 seconds.
“We expect to have a very light ad load, with no more than four or five minutes of ad space per hour, and including very strict frequency caps so subscribers don’t see the same ad repeatedly,” Peters said.
What will happen to Peru?
Before consulting Skip Intro of El Comercio, Netflix representatives clarified that the platform’s basic service will not yet be available in Peru.
“We appreciate the interest in the Basic plan with ads. We are launching it in 12 countries and it will not be available in Peru. As we learn and improve the Basic with Ads plan, we will decide whether to launch it in more countries. In Peru consumers can choose between our three available plans”they held.
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This new plan aims to enable the advertiser to “reach the right audience” and ensure that the ads displayed “are relevant to consumers.”
What plans does Netflix have so far?
There are currently three plans for users: basic, standard and premium.
These have limitations. The basic plan can only have one screen active with Netflix at a time, for example, or that you don’t have access to HD or Ultra HD quality. For its part, the standard has up to two screens active at the same time and access to HD quality. Only the premium plan has 4 screens active at the same time and all other benefits.
The prices of these plans vary depending on the country in which the user is located. In the United States, the plans cost $9.99, $15.49, and $19.99, respectively. In Peru, the cheapest plan, the basic one, costs S/. 24.90; the standard, S/. 34.90; and the premium, S/. 44.90. In other words, the prices for our country are much cheaper than those of the company’s country of origin.
If Netflix charged the same price, from the United States, of the basic plan in Peru, it would end up costing the user approximately S/. 38. That is, S/. 13 more than what a Peruvian user currently pays. In the case of the premium, this would cost more than S /. 77.
What ads will appear on Netflix?
Ted Sarandos, at the Cannes Lions International Festival of Creativity, had already pointed out that the company was “talking” with advertising companies. Google was one of the main candidates to partner with the streaming service. Likewise, Magnite, FreeWheel and Comcast were also on the radar. However, after the statement, it is confirmed that Microsoft has been chosen.
“Microsoft has the proven ability to meet all of our advertising needs as we work together to create a new ad-supported offering. More importantly, Microsoft offered the flexibility to innovate over time on both the technology and sales sides, as well as strong privacy protections for our members.”said Greg Peters, Netflix’s chief operating and product officer.
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For his part, Mikhail Parakhin, president of Microsoft web experiences, indicated that users will see the advertising that usually has pages related to the technology giant, such as the MSN page, for example. “At launch, consumers will have more options to access Netflix’s award-winning content. Marketers looking to Microsoft for their advertising needs will have access to Netflix’s audience and premium Connected TV inventory. All ads published on Netflix will be available exclusively through the Microsoft platform. Today’s announcement also supports Microsoft’s approach to privacy, which is based on protecting customer information.”he indicated.
In this way, Netflix seeks to advertise more directly and not just as discreet “product placement” in its own television series or movies. The “cheap plan” with ads will be a reality.
On the other hand, the platform will not run ads on children’s shows or their original movies. While this isn’t final, at least they won’t be at the launch of the new plan. In addition, the advertisements will appear before and during the reproduction of the content, but not at the end. The estimate is 4 ads per 1 hour of content.
What will not be available to subscribers of the new Netflix ad-supported plan?
According to what was collected by TechCrunch, subscribers who opt for this service will not have all the content available, at least at first. The reason? The contracts with the studios did not contemplate that the platform pass advertisements before, during or after the broadcast of their series, films or documentaries.
“We can include the vast majority of what people watch on Netflix in the ad-supported plan. There are some things that are not, and we are talking to the studios. But if we launch the product today, the ad tier members will have a great experience. And we will remove some extra content […] certainly not everything, but do not think that it is a major obstacle for the business”said Ted Sarandos, CEO of Netflix.
On the other hand, users will also not have the function of viewing content offline available. That is, it will no longer be possible to download it to enjoy it later. The plan will lack one of the most popular paid features, according to what has been revealed in the Netflix iPhone app code. However, the company has not denied or confirmed this.
Source: Elcomercio
I have worked as a journalist for over 10 years and have written for various news outlets. I currently work as an author at 24 News Recorder, mostly covering entertainment news. I have a keen interest in the industry and enjoy writing about the latest news and gossip. I am also a member of the National Association of Journalists.
