Netflix is predicting that its new low-cost subscription option (featuring ads) could boost its annual revenue and pull in additional 40 million viewers by the end of 2023. According to the Wall Street Journal, The California-based streaming giant and its advertising partner Microsoft Corporation recently met with ad buyers to discuss the new strategy in the hope of securing some deals ahead of the launch date.
Netflix currently has around 220 million subscribers, which is still the industry’s largest audience. It always said it would remain ad-free, but a recent drop in customers amid the ongoing cost of living crisis has forced bosses to reconsider their options. Netflix will join rivals HBO Max and Disney + both of which recently introduced an ad-supported subscription option.
According to reports, Netflix expects to have 4.4 million unique viewers worldwide by the end of 2022, with 1.1. million of those coming from the US, projections suggest. By the third quarter of 2023, the company estimates that it will have over 40 million unique viewers, with 13.3 coming from the US. In a recent statement, a spokesperson for Netflix said: “We are still in the early days of deciding how to launch a lower priced, ad supported tier and no decisions have been made.”
Netflix lost nearly one million subscribers in its June quarter. The following month, a letter was sent to shareholders revealing that new ad-supported options would begin in early 2023.
Of course, Netflix won’t attract new viewers by low-cost options alone; it will also rely on its most popular shows, which include Squid Games, The Crown and Stranger Things, the latter of which is going into its final season. The streaming giant believes that a combination of low-cost options and hit programming will help it claw back the many viewers it lost in the last year. As always, only time will tell.