Streaming Services | Next year, Netflix will offer cheaper subscriptions with advertisements – sharing IDs has grown into a problem plaguing the company

Culture|Streaming services

Netflix plans to offer a subscription format that includes advertisements from the beginning of next year. About Netflix’s plan news among others, the US entertainment magazine Variety.

The streaming giant announced the monthly subscription containing advertisements in a press release sent to shareholders, which also reported on the number of subscribers for the company’s most recent quarter.

Read more: The number of Netflix subscribers decreased by almost a million – The number is lower than expected

The company has not yet revealed the price of the future subscription format, but it is said to be more affordable than the current packages. Currently, Netflix’s cheapest subscription form costs 7.99 euros in Finland and the most expensive 15.99 euros.

The New York Times told in May that Netflix might launch an advertising-funded subscription option as early as October-December. The newspaper’s news was based on an internal memo from Netflix.

Read more: The New York Times: Netflix may come with ads earlier than originally planned

Last week on Netflix announced about advertising-related cooperation with Microsoft. According to Netflix, Microsoft sells ads exclusively in the initial phase of the new subscription format.

“Microsoft supports us in marketing, and helps us build a new ad-based product,” Netflix said in last week’s announcement.

Netflix’s subscriber numbers have been declining for two quarters in a row. Netflix at the beginning of the year lost over 700,000 subscribers when it pulled out of Russia after the country invaded Ukraine.

Netflix has more than 220 million subscribers internationally, which makes it the overwhelming market leader in streaming services.

Digital Media Finland’s consultant Tommi Rissanen says that Netflix’s recent solutions are part of a trend in streaming services where companies are looking for new revenue models. Disney+ is too announced from an advertising-funded subscription model.

During Corona, Netflix and other streaming services got a big boost in the stock market, but since then the results haven’t been the same.

“The cheaper price of an advertising-funded subscription can bring more viewers to the services, and in addition, after counting the linear TV station, there would be plenty of advertising dollars to share,” Rissanen says.

Netflix has also announced a new strategy to prevent identity sharing in five Central and South American countries. of the British broadcasting company BBC by Netflix plans to charge $2.99, or about 2.92 euros, per month for adding a new home to the account.

In the future, Netflix can be watched on a TV outside the home for a maximum of two weeks, as long as the account has not been used on the device before, let’s tell On Netflix’s support page for Honduras. After two weeks, the television will be blocked if a new home is not added to the account. Two weeks of viewing outside the home is possible once a year.

Token-sharing bans will be introduced in August in Argentina, the Dominican Republic, El Salvador, Guatemala and Honduras. Netflix in March started test the strategy in Chile, Costa Rica and Peru.

News agency Bloomberg by Netflix ID sharing is especially common in Latin American countries. In the same countries, Netflix’s turnover is also growing.

Rissanen says that it is a global phenomenon. Other streaming services, such as Spotify, have also had to come up with solutions to prevent the sharing of IDs.

Netflix according to Rissanen, the quick decisions made this year show how tough the competition is. Other streaming services have their own competitive advantages, such as Nordic content on Viaplay or, in the case of Disney+ and Paramount Plus, a wider selection of their own films.

Simply increasing the number of subscribers is no longer enough, and other services are trying to beat the first to arrive, Netflix, at its own game. However, there may be too many players on the field.

“I predict that there will be more consolidation, i.e. merger development, because few viewers want to pay for six different services,” says Rissanen.