"While the strategic shift may cannibalize its existing market - particularly at the $9.99 tier - it's a great move in this inflationary environment, where households continue to rationalize their streaming choices," said Fred Boxa, associate director of consulting firm Arthur D. That may well work to its advantage in a time of economic volatility. Some Wall Street analysts said the ad-supported version of the Netflix service might entice some price-sensitive existing subscribers to switch to the less-expensive option. It will be priced at $6.99 a month in the United States, or 30% less than its basic ad-free tier, and contain about five minutes of commercials per hour.Įventually, Netflix, now operating in more than 190 countries globally, aims to provide "personalized" advertising, much as it recommends individualized viewing recommendations.Ĭhief Financial Officer Spencer Neumann said the new service would make money over time, but cautioned, "It's going to be pretty small out of the gates." Netflix plans to launch an ad-supported version of its service in the United States and 11 other countries in November.
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