Wed, 20 Jul 2022 12:21 PM IST
Netflix is planning to launch new ad-supported streaming shows in early 2023. The over-the-top (OTT) platform is hoping to attract a new group of price-conscious customers and turn around its sliding membership numbers with a new ad-supported streaming bundle, as reported by Variety.
While announcing its second-quarter earnings, it informed that the platform plans to introduce the ad-supported plan "around the early part of 2023."
According to Variety, Netflix said, "We'll likely start in a handful of markets where advertising spending is significant," Netflix said in its Q2 letter to shareholders. "Like most of our new initiatives, our intention is to roll it out, listen and learn, and iterate quickly to improve the offering. So, our advertising business in a few years will likely look quite different than what it looks like on day one."
However, the OTT platform has not unveiled pricing for the new ad-supported plan, it is likely to cost less than the plans without any commercials.
Greg Peters, Chief Operating Officer (COO) and Chief Product Officer (CPO) of Netflix said that "Netflix believes the per-subscriber economics on the ad-supported plan will be 'neutral' with or better than what it sees with traditional subscribers." He also confirmed that initially Netflix ads will be sold exclusively by Microsoft.
"Microsoft is investing heavily to expand their multibillion [dollar] advertising business into premium television video, and we are thrilled to be working with such a strong global partner. We're excited by the opportunity given the combination of our very engaged audience and high-quality content, which we think will attract premium CPMs [cost per thousand impressions] from brand advertisers," it said.
Earlier on Tuesday, Netflix averted its own worst-case scenario of subscriber losses, posting a nearly 1 million drop from April through June, and predicted it would return to customer growth during the third quarter. However, a report by Reuters suggests that investors took the forecast as a signal that Netflix could still find new subscribers despite a rocky global economy and signs of saturation in its biggest market, the United States (US) and Canada.