Netflix has announced that its lowest priced ad-supported plan – ‘Basic with Ads’ – will launch in November. It will be available in 12 countries – Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, UK and USA.
In its announcement, Netflix said the ads will be 15 or 30 seconds long and will appear before and during broadcast shows. Overall, viewers can expect to see 4-5 minutes of ads per hour. Similar to the service’s current Basic plan, video quality will be limited to 720p HD instead of 4K with HDR available in the Premium tier.
The most important part of the announcement is that the Basic with Ads plan will not allow users to download programs, a popular functionality available to its Basic, Standard and Premium subscribers.
Analysis: Netflix may have missed a trick in India
Anyway, as you can tell, India is not among the countries where this new ad-supported plan is being rolled out. Netflix, however, said that based on audience reaction in these countries, it will roll out this plan in more countries over time. Purely from the perspective of Indian viewers, it’s a good thing the ad-based plan isn’t being implemented here. But it’s a surprise that Netflix hasn’t seen fit to include India in its scheme of things when it comes to this new ad-supported plan, which is being made to prop up its faltering revenues.
In India, Netflix plan fees are the most expensive. 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 Rs 149 per month mobile-only plan and Rs 199 per month Basic plan are relatively competitive. But they do not allow download and many other features are not available either. Their standard plan at Rs 499 plan is fine. But Rs 499 per month would be close to Rs 6,000 per year, which is much more expensive than anything offered by other platforms in India right now. Due to its price, Netflix was unable to add customers to its kitty. In 2021, the company could only add 18.2 million customers, 50% less than in 2020. Its competitors like Amazon Prime Video, Disney Plus Hotstar, on the contrary, are increasing their customer base at a faster pace.
The popular belief is that the ad-supported plan, in some ways, could have been helpful for Netflix to offer something at a low price without exactly losing revenue in India. After all, the Indian market is not new to ad-supported plans. For example, it’s not uncommon to find ads running during movies or series on Disney Plus Hotstar. Even though they are a distraction, the platform has not faced any reaction from viewers. In fact, Hotstar pushes ads on its regular plan (there is no separate ad-free plan). Netflix, on the other hand, has several plans that give viewers options. So it might have made commercial sense for Netflix to have tried in India and, in the process, improve its earnings here.