Netflix has announced that the golden age of streaming is over

Ads will soon dot the previously unblemished content on Netflix.

On Thursday, the streaming giant announced a cheaper subscription plan with ads. The plan, called Basic with Ads, will cost $6.99 per month and will launch in the US in November. Here is the description of the level:

Basics and Ads will cost just $6.99 per month in the US and start November 3rd at 9am PT.

Based advertising will be available in Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, UK and USA.

Existing plans and memberships will not be affected. Ad Free is an add-on option to Netflix's existing Basic ($9.99), Standard ($15.49), and Premium ($19.99) ad-free plans.

Expect to support streaming on Netflix for some time. Last April, CEO Reed Hastings said the company would consider this option, and a few months later, CEO Ted Sarandos confirmed to the media that a promotional announcement was being made during the negotiations. with the company.

It's no surprise that Netflix is ​​looking for ways to target and capture new customers. In 2022 alone, Netflix lost millions of subscribers. Rising subscription prices and the elimination of password sharing have pushed many Netflix subscribers to their limits. In addition, the unforgiving streaming sector, with heavyweights such as Prime Video, Disney +, HBO Max and Hulu offering a variety of streaming options and subscription prices that are cheap or comparable him.

"We left out a large segment of customers, which are people who say, 'Hey, Netflix is ​​too expensive for me, and I don't want ads,'" Sarandos said. "We're adding a layer of advertising. We don't put ads on Netflix just so you know.

Netflix co-CEO Reed Hastings has telegraphed the ad plan, suggesting during the first earnings call in April that the ad could expand within a year or two. "Those who follow Netflix know that I am against the complexity of advertising and a big supporter of the simplicity of subscriptions. But although I am a supporter of that, I am a big fan of consumer choice," he said. "And allowing consumers who like to have low prices and accept advertising to get what they want makes perfect sense."

Then, the New York Times reported in May that Netflix told its employees that the media-based plan could begin by the end of the year, earlier than expected. Netflix lost 200,000 subscribers in the first three months of 2022 and predicted a bigger loss to come in its April shareholder letter. The company's stock price has fallen more than 70% this year (vs. the S&P 500's 21% drop), wiping out about $70 billion of its market capitalization and causing shareholders to face lawsuits.

Netflix CEO Ted Sarandos confirmed on Thursday that the company will begin testing a low-cost, ad-supported subscription tier. Media companies reaching out to more partners can make it easier to break into the media world, Sarandos said during a speech at the Cannes International Media Festival. These partners will be Comcast, NBCUniversal and Google.

Now Netflix's hope is to generate revenue by accepting ads. And he is not alone. Competitors such as Hulu and HBO Max already offer ad-based plans that are cheaper than their ad-free streaming services, while Disney+ announced in March that it will launch an ad-supported subscription service by the end of 2022 .

Netflix has become the last refuge of ad-free media, but its subscription model is not sustainable. Will ad money breathe new life into the streaming service, or is this the end of the golden age of streaming?

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