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Netflix launches an even cheaper ad-supported option

Streaming stalwart Netflix will introduce the ‘Basic with Ads’ plan in November, which will be cheaper than the core product and subsidised with ads.

According to Netflix’s pricing page, the Basic with Ads option will be £4.99 a month in the UK when it launches, and it will also be available in Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, and the US. This ad supported option is on top of the existing array of choices, namely the existing ad-free Basic, Standard and Premium plans.

The cheaper, ad supported service has its video quality capped at 720p/HD – which is going to be true for the Basic plan as well come November – viewers will get an average of 4 to 5 minutes of ads per hour, a limited number of movies and TV shows won’t be available due to licensing restrictions, and there’s no ability to download titles.

Price wise in the UK the Basic plan is £6.99, Standard is £10.99 and Premium is £15.99. The differentiators are basically down to how many downloads can be made, how many devices/users can access it, plus differences in video quality. And now it seems some programming will be excluded from the cheapest plans.

“Falling Netflix subscriber numbers in recent months have shown that the nation’s streaming habits are not immune to the cost-of-living crisis, so this cheaper subscription could prove popular for many,” said Ernest Doku, streaming and TV expert at Uswitch.com. “The £4.99 monthly cost is £2 cheaper than the current most basic package, and better than half the price of the standard subscription – which could be attractive for new customers. Customers opting for the ‘basic’ option won’t just have to contend with up to five minutes of adverts an hour, however, they will also miss out on some films and TV series, and will only be able to stream on one device at a time with reduced video quality.

“Another big loss will be the absence of an option to download TV and films to your devices, which will be sorely missed by parents trying to entertain children on flights. It’s worth remembering that if you feel you aren’t getting value for money from your subscription, you can cancel penalty free whenever you want. The whole industry is engaged in a battle for viewers, and content quality alone is no longer enough to keep subscribers.”

It’s true that it has been reported that Netflix subscriber numbers have been falling, however it’s difficult to know exactly why, or indeed if such meteoric rises over the last decade it could be expected to carry on forever. There’s always the cost of living crisis to consider, and rising costs or the removal of features that were once a given seems an obvious thing to point to when looking at why people might cancel their subscription.

But it’s quite possible changes like this go under the radar for many who don’t read up on such things in the press. It’s also possible many Netflix users have no idea which of the various packages they are on anyway, or even that there are multiple options.

There are other possible factors – Netflix is no longer the by-word for streaming that it once was. Disney, Apple, Amazon and others are all now firmly in the game, and really unless money is no option there is a ceiling to how many of these services any household is going to maintain at once.

So it’s a choice – and since there are no locked in contracts with these services as there is with satellite or cable TV, people are empowered to switch between them each month if they so wish.

Recently Amazon has famously spent huge sums of money trying to reboot the Lord of the Rings franchise with its show the Rings of Power, while HBO has started streaming a sequel to the massively popular Game of Thrones series. And Disney, who owns a ridiculous amount of IP now, is continually pumping out Star Wars and Marvel flavoured snacks.

Perhaps as soon as Netflix gets another Breaking Bad level cultural tent pole bit of programming on its roster the numbers will start moving in the other direction. But they don’t come easily or cheaply, so in the meantime tweaking its prices is one of the levers it can pull to try and keep hold of its customers.

 

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