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Netflix Announces Ad-Supported Tier at a Cheaper Price

Netflix Announces Ad-Supported Tier at a Cheaper Price

King of streaming services, Netflix (NASDAQ: NFLX), is offering a cheaper option for watching your favorite shows and movies, but there’s a catch.



Netflix’s new ad-supported tier will cost between $7 to $9 a month and consist of four minutes of ads for every hour of content. Users interested in this plan can certainly save a few bucks compared to the current plans: Netflix Basic, $9.99/mo, Netflix Standard, $15.49/mo, and Netflix Premium, $19.99/mo.



Netflix, one of the only remaining streaming services that do not currently support advertisements, appears to be caving in, and CEO Reed Hastings explained why. “Those who have followed Netflix know that I have been against the complexity of advertising, and a big fan of the simplicity of subscription,” Reed Hastings shared. “But as much as I am a fan of that, I am a bigger fan of consumer choice. And allowing consumers who would like to have a lower price, and are advertising-tolerant get what they want, makes a lot of sense. It is pretty clear that it is working for Hulu. Disney is doing it, HBO did it. We don’t have any doubt that it works.”



It is estimated that the ad-supported tier will reach 40 million viewers by the end of next year generating as much as $3.6 billion in ad revenue in the US and Canada by 2025 and $8.5 billion globally.



Shares were higher Wednesday afternoon after this big announcement, reported by The Wall Street Journal.



I don’t know about you, but the thought of ads on Netflix has me feeling some type of way.

StreetWise IR News on Netflix
Maggie Caraway