Netflix has announced that its lower priced ad-supported plan – ‘Basic with Ads’ – will be launched in November. It will be available in 12 countries – Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, the UK and the US.
In its announcement Netflix said that ads will be either 15 or 30 seconds in length, and will pop up both before and during streamed programs. Overall, viewers can expect to see 4 to 5 minutes of ads per hour. Similar to the service’s current Basic plan, video quality will be limited to 720p HD rather than the 4K with HDR available on the Premium tier.
The most important part of the announcement is that Basic with Ads plan won’t allow users to download shows, a popular functionality available to its Basic, Standard, and Premium subscribers.
Analysis: Netflix may have missed a trick in India
Anyway, as you can say, India is not among the countries where this new ad-supported plan is being rolled out. Netflix, however, did say that based on the audience reaction from these countries, it will launch this plan in more countries over time. Purely from Indian viewers perspective, it is good that the ad-based plan is not being rolled out here. But it is a bit of a surprise that Netflix has not thought it fit to include India in its scheme of things when it comes to this new ad-supported plan, which is being done to shore up its faltering revenues.
In India, Netflix plan rates are the costliest. It offers 4 monthly subscription plans – Mobile, Basic, Standard, and Premium. After sustained criticism, the streamer announced a massive cut in plan charges in December 2021. Its mobile-only plan at Rs 149 per month and Basic plan at Rs 199 per month are relatively competitive. But they don’t allow for downloading and many other features are also unavailable. Its Standard plan at Rs 499 plan is good. But Rs 499 per month would be close to Rs 6000 per year, which is way pricier than anything offered by other platforms in India now. Due to its pricing, Netflix has been unable to add customers to its kitty. In 2021, the company could add only 18.2 million customers, which was 50% less than that of 2020. Its competitors like Amazon Prime Video, Disney Plus Hotstar, on the contrary, are growing their customer base at a faster clip.
The popular belief is that the ad-supported plan in a sense could have come in handy for Netflix to offer something at a low price without exactly losing out on revenue in India. After all, the Indian market is not new to ad-supported plans. For example, it is not uncommon to find ads running during films or series on Disney Plus Hotstar. Even though they are distracting, the platform has not faced any viewers backlash. In fact, Hotstar shoves ads in its regular plan (there is no separate non-ad plan). Netflix, on the other hand, has a bunch of plans offering choice for the viewers. So, it may have made good business sense for Netflix to have tried in India and in the process improve its earnings here.
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