Status: 10/14/2022 8:59 am
In the battle of streaming services for subscribers, Netflix is now taking the step towards an offer with advertising. Unlike the competitor Disney, it should be cheaper than the previous basic tariff.
From November 3rd, the Netflix streaming service will offer a version of the service with ads. It should be cheaper than the previous basic subscription. In Germany, the service will cost EUR 4.99 a month with advertising, announced top manager Greg Peters. The model with ads will initially be launched in twelve countries, including France, Great Britain and the USA.
More limited offer
Initially, the commercials should be 15 or 30 seconds long and run during or before the series and films. On average, customers would have to be prepared for four to five minutes of advertising per hour. “A limited number of films and series will not be available for licensing reasons, but we are working on it,” said the streaming service. The background to this is that Netflix can freely dispose of its own productions, but some of the content licensed from other authors is not released for advertising models.
The version with advertising also has no download function. The subscription can be changed or canceled at any time. Peters emphasized that the new model has no effect on previous subscriptions. “The basic subscription with ads complements our existing ad-free basic, standard and premium subscription levels.” So far there are no commercials on Netflix. The previous ad-free basic tariff costs 7.99 euros per month. The standard tariff costs 12.99 euros per month. The premium subscription costs 17.99 euros.
Disney dares more
Netflix is acting more cautiously than streaming rival Disney. The group chose a more aggressive pricing model for the upcoming version of its Disney+ streaming service with advertising. For the previous price of the cheapest tariff without advertising, according to previous announcements, there should only be the version with ads. If you want to continue watching Disney + without advertising, you should pay more after the start of the advertising version in December.
Disney had caught up with Netflix in terms of the total number of streaming subscriptions by mid-year. However, the entertainment group also benefits from bundle offers from its three streaming services Disney +, Hulu and ESPN, in which each subscription is counted individually.
With the advertising versions, the streaming services are reacting to the growing competition and at the same time the consumer mood is declining. The competitor Amazon, for example, is in Germany with the advertising-financed offer Freevee at the start. Films and series are shown there at no additional cost, but with commercial breaks. After the USA and Great Britain, Germany is the third country in which Amazon has placed the offer.
No savings are made on smartphones and streaming
However, a current survey by the management consultancy Deloitte shows that at least German consumers do not want to save on streaming, smartphones and the Internet. Half of the consumers surveyed plan to spend at the previous year’s level. “For the desired end device, 36 percent would spend more than in 2021,” said Deloitte. Only 14 percent wanted to reduce their spending on devices.
Despite inflation and the economic slump, there are no signs of consumer slack in digital consumer goods: the industry can continue to count on stable sales, said Deloitte industry expert Tim Bottke. Because most respondents do not want to reduce the budget for media subscriptions.
The proportion of users of paid services has risen from 61 to 65 percent compared to the previous year, and the growth in subscriptions in this country has “not yet passed its peak,” according to the study. “In Germany, 31 percent of those surveyed can imagine starting streaming with commercial breaks, with the willingness in the younger age segments being particularly high.”