[Asia Economy New York=Special Correspondent Joselgina] The world's largest online video service (OTT), Netflix, will launch an ad-supported plan priced at $6.99 per month starting November 3 (local time). The plan features a lower monthly subscription fee than the existing plans in exchange for including advertisements in the content. In South Korea, the price is set at 5,500 KRW per month.
According to the ad plan introduction announced by Netflix on the 13th, the plan will first be implemented in 12 countries including South Korea. These include ▲ four countries in the Americas: the United States, Canada, Mexico, and Brazil ▲ five countries in Europe: France, Germany, Italy, Spain, and the United Kingdom ▲ and three countries in the Asia-Pacific region: South Korea, Japan, and Australia.
The ad-supported Basic with ads plan adds ad viewing to the current Basic plan. Users will have to watch an average of 4 to 5 minutes of ads per hour, and downloading movies and TV series will not be available. Additionally, ads of 15 to 30 seconds in length will automatically be shown before and after content viewing. The video resolution is 720p, not 1080p. In South Korea, this plan will be launched at 1 a.m. KST on November 4 at a monthly price of 5,500 KRW.
Netflix explained, "The newly launched ad-supported Basic plan is a new plan that complements the existing ad-free membership," adding, "The Basic with ads plan offers all Netflix services at a lower price with a few ads."
Accordingly, Netflix's plans will be three types: Basic with ads ($6.99/month), Basic ($9.99), and Standard ($15.49). CNBC reported that the $6.99 monthly price in the U.S. is cheaper than the ad-supported plans of Disney Plus ($7.99/month), HBO Max ($9.99/month), and Hulu ($7.99/month).
Netflix, which has secured over 200 million subscribers worldwide, launched this ad plan after a sharp decline in new subscribers. The company, which was considered a major beneficiary of the pandemic, had previously shown a negative stance toward introducing such ad plans. Earlier, Netflix announced that paid subscribers decreased by 200,000 in the first quarter compared to the previous quarter. In the second quarter, subscribers decreased by 970,000 compared to the first quarter. However, it expects an increase of 1 million subscribers in the third quarter.
Netflix plans to disclose subscriber numbers, earnings forecasts, and other details along with its third-quarter earnings report after the market closes on the 18th next week. Meanwhile, Netflix's stock price closed up 5.27% compared to the previous session on the New York Stock Exchange as it announced the launch of the ad-supported plan next month.
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