Netflix with ads could be half the normal price

The streaming giant is hopeful it can attract more subscribers with a lower monthly rate to those who are willing to watch ads.

The new price plan will see about four minutes of adverts per hour, which is less than other streaming services.

Currently cable tv services offer between 10 and 20 minutes of ads per hour, with streaming services typically offering less. However, some services such as Hulu, are often criticised for repeatedly showing the same ads.

According to Netflix, the ads will only been shown before and during some shows but not after. Netflix are currently working to put together a cost-effective plan which still provides a pleasant viewing experience.

If given the green-light, the ad-supported service could be introduced towards the end of the year in at least a half dozen market, with the full rollout taking place early next year.

While a price has yet to be confirmed, Bloomberg reports that Netflix is considering a monthly fee between $7 to $9 which would be around half the price of their most popular ad-free plan which is $15.50 a month.

There are few details available about the upcoming cheaper option, but people familiar with the company's plan have said bosses are trying to secure deal with advertisers upfront so as not to overpromise to its viewers.

After a huge subscriber loss earlier this year, Netflix made the decision to introduce advertising to its streaming service. Management are hopeful that the new plan will attract new customers and offer a cheaper alternative for people who are considering cancelling their subscription.

According to media consultancy, Ampere Analytics, the new ad-based service could see Netflix generate $8.5 billion globally each year, by 2027.

The ad-supported service will largely be handled by Microsoft Corp. who are Netflix's exclusive advertising technology and sales partner.

Announcing the partnership in July, chief operating officer and chief product officer Greg Peters said: "Microsoft has the proven ability to support all our advertising needs as we work together to build a new ad-supported offering."

The tech giant has a $10 billion advertising business which will handle the advertising agencies and technology providers.

Peters added: "Our long term goal is clear. More choice for consumers and a premium, better-than-linear TV brand experience for advertisers. We’re excited to work with Microsoft as we bring this new service to life."

Meanwhile, Mikhail Parakhin, president of web experiences at Microsoft said: "We’re excited to offer new premium value to our ecosystem of marketers and partners while helping Netflix deliver more choice to their customers.

"At launch, consumers will have more options to access Netflix’s award-winning content."

Plans to introduce ads were first announced in April, after Netflix revealed they had their biggest subscriber loss in a decade.

Rival streaming service Hulu also offer an ad-supported plan for viewers. Meanwhile, Disney Plus recently announced they would be doing the same.

Topics: Netflix, Microsoft, Disney Plus