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　　In order to attract users, Netflix launched lower-priced advertising packages.

　　On October 14, local time, streaming media giant Netflix (Netflix) said on its official website that it will officially launch a low-priced package with ads in November, priced at $6.99 per month. In the ad package, 4 to 5 minutes of ads appear in each hour of video, with each ad being 15 or 30 seconds long.

　　Netflix offers a $6.99/month Ad Basics package.

　　$3 cheaper to attract new users

　　Netflix calls the subscription service "Basic with Ads" and plans to roll out in stages from November 1 to 10 in 12 countries including the United States, the United Kingdom, Canada, Germany, and Japan.

　　In the US, the ad-free Basic plan costs $6.99/month, which is $3 cheaper than the $9.99/month ad-free Basic plan. Netflix currently has two more expensive plans, the standard plan at $15.49/month and the premium plan at $19.99/month.

Netflix's four packages.

　　Subscribers to the Ad Basic plan can enjoy 720p HD, which is also available on TV and mobile devices. The difference from the other three packages is that when users of the ad package watch a video, there will be an average of 4 to 5 minutes of ads per hour, each 15 to 30 seconds, and these ads will be played in the title and video.

　　Additionally, around 5% to 10% of shows will not be available on ad packages due to licensing restrictions, nor will users be able to download movies and episodes.

　　Netflix chief operating officer Greg Peters said that users who have subscribed to other plans can continue the original plan, and if users want to switch to the advertising plan, they can make changes in the account settings.

　　The Wall Street Journal said that Netflix's foray into the advertising business has certain risks, because a large proportion of users may choose advertising packages for low prices, which will affect the current user base.

　　But Netflix expects that while existing users may switch to the ad package, it will also attract more new users. The increase in users will help make Netflix more attractive to advertisers because it increases the visibility of ads, Peters said.

　　Greg Kahn, a former ad industry executive who now runs a media consultancy, said Netflix has premium content, and ad marketers are willing to align with premium content, “There is a good chance that Netflix will gain new users and generate revenue. ".

　　Ad space sold out, attracting auto, luxury goods advertisers

　　Netflix's service to advertisers can be described as comprehensive. The official website shows that advertisers can target audiences by country, region and program type, and can also choose to place ads in the top 10 programs. In addition, Netflix allows advertisers to reject content such as pornography or violence.

　　In order to detect advertising data, Netflix has also brought in third-party agencies. The company also said it has partnered with digital media analytics platform DoubleVerify Holdings and digital ad verification firm Integral Ad Science Holding to monitor ad visibility and traffic data starting in the first quarter of 2023.

　　Jeremi Gorman, Netflix's president of global advertising, said the company will also collect the birth dates and genders of ad package users and use that information for ad targeting.

　　Gorman said Netflix's advertising space is now basically sold out, and the company has attracted automakers, consumer goods companies and luxury brands.

　　Netflix has insisted on saying no to ads for years, but in April, the streaming company abruptly reversed course.

　　In the first quarter of 2022, Netflix suffered the loss of subscribers for the first time, a total of about 200,000 subscribers were lost, and the stock price plummeted 35% in one day. The decline continues, with Netflix having about 220 million users as of June this year, down nearly 1.2 million since the beginning of the year.

　　In the previous second quarter report, Netflix expected to add 1 million users in the third quarter. A Wall Street Journal report said Netflix is targeting 13.3 million ad package subscribers in the U.S. in the third quarter of 2023.

　　For now, Netflix Chief Operating Officer Greg Peters declined to predict the number of users and revenue the company could attract with the new package. But he said the company is forecasting revenue from the ad-supported plan will be on par with, or even higher than, the ad-free plan. The company will announce its fourth-quarter earnings in the early hours of October 19, Beijing time.

　　It’s worth noting that in addition to Netflix, The Walt Disney Company is also planning a low-cost ad-included package. The company expects to launch an ad-free version of Disney+ in December for $7.99/month, while the ad-free basic plan will increase from $7.99/month to $10.99/month.

　　As of the close of U.S. stocks on October 13, Netflix rose 5.27% to $232.51 per share, and the stock price has fallen by more than 60% since the beginning of the year.