Netflix Bringing Even More Ads For Certain Customers
Netflix just released its new Basic Ads tier, which offers the lowest price for the streamer at $6.99 a month, but the company is now mulling over the idea to bring even more ad-based tiers in. According to co-CEO, Ted Sarandos, “We have multiple tiers today, so it’s likely we’ll have multiple ad tiers over time, but nothing to talk about yet.” The issue right now this ad-tier Netflix has offered does not include all the programs the streaming company has to offer.
We would imagine that Netflix has been trying to work out a deal with studios to agree to bring their content to the ads-based tier, but they likely also have to pay even more money for that to happen. There could be some sort of deal struck that would see Netflix add even more ad space to a new tier, which could then get kicked back to studios, making the deal to bring their content to the ad-based tiers more appealing. This is just speculation, but studios might not want their content in an ad-based tier, because ads tend to turn people off.
Netflix currently offers four different tiers, with the Basic with ads tier coming in at $6.99 per month, Basic at $9.99 per month, Standard at $15.49 per month, and Premium at $19.99 per month. We are not sure what kind of tier workaround Netflix would be offering, but there could be some sort of middle-ground ads tier that would be between $6.99 and $9.99 per month. The streaming giant has clearly been thinking outside the box to help with its growing issues of no longer being the most used app.
Netflix barely introduced this new ads-based tier in November, which we imagine has been a result of the company trying to stop its mass exodus of subscribers. Back in April, the company posted its first-ever loss in subscribers, with some 200,000 accounts being canceled. This led to all kinds of issues with investors, the company being sued for lying about profits, shows being canceled, and massive layoffs.
Finding a way to bring in all the Netflix content in a new ads tier is something that makes sense, but it would also be more expensive for all parties concerned. The company has also been overtaken as the #1 streamer, with Amazon Prime Video now taking the top spot. Netflix is going to have to do something drastic to bring back its subscriber count, and one of those ideas has been the proposed idea of streaming live sports.
One way Netflix can bring people back is not with ads, but by possibly altering its prices in a way that will make people think the company is being reasonable with its prices. Having the Standard package at $15.49 per month has been hurting the company for a long time, and if it were lowered by a couple of dollars or so a month, it could cause those frustrated customers to come back. This is just an idea, but it appears that the company might be wanting to stick with ads for the foreseeable future.