Netflix May Launch Free Ad-Supported Tier in Asia and Europe

Netflix is preparing to make a significant change to its subscription model, introducing a free, ad-supported plan in select Asian and European markets. This initiative is part of Netflix’s strategy to grow its user base and compete with local free TV providers. It aims to attract a wider audience by providing free access to its vast content library. Users will not need to pay for access to Netflix content and will be able to watch anything on the platform for free, albeit with advertisements, if this plan is implemented in India.

Netflix is launching free, ad-supported plan in Asia and Europe

A Bloomberg report claims that Netflix’s initiative is aimed at areas where free television networks with advertising are already widely available. According to the report, Netflix is just beginning to talk about this possible relocation. A free service with a restricted content selection was previously tested by the company in Kenya; however, that initiative was eventually abandoned. According to people with knowledge of the situation, the goal of this approach is to draw in more users and strengthen Netflix’s position against local free TV providers.

It is anticipated that the free tier will operate on a similar principle, offering a limited and curated library by concentrating on developed markets rather than developing ones, like Germany and Japan. Additionally, there’s a chance that the streaming resolution will decrease and that the number of ads will rise. The streaming service provider’s strategy to target expanding markets, which generate the majority of its revenue, is also highlighted in the report.

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What does it mean for advertisers?

Advertisers anticipate that the launch of a free plan will greatly increase viewership, which will increase Netflix’s ad revenue. The business is also working hard to create its own advertising technology platform, which it plans to introduce by the end of 2025. It is anticipated that the platform will provide advertisers with sophisticated tools for buying ads, obtaining data, and assessing the effectiveness of their campaigns, thus improving their overall advertising experience.

According to reports, Netflix’s ad-supported tier has seen a stunning increase in usage, with 40 million monthly active users worldwide—a sharp increase from five million users annually. This sharp increase highlights how well Netflix’s strategy of luring new customers with more affordable plans has worked. The business reportedly has no plans to introduce this free option in the US, where demand for its current models is already almost at capacity.

Netflix’s decision to launch a free, ad-supported tier

Amid fierce competition in the streaming market, where businesses are progressively providing bundles to entice users, the ad-supported tier is expanding. Netflix has made some adjustments to stay competitive, such as tougher policies against password sharing and price increases for multiple subscriptions. Since its November 2022 launch, Netflix’s ad-supported tier has seen significant growth in popularity, with 40% of all new sign-ups in countries where it is eligible. Netflix has announced plans to work with top players in the industry, including The Trade Desk, Google Display & Video 360, Magnite, and Microsoft, to improve user engagement and streamline automated ad buying. This tactical move seeks to provide customers creative ways to buy ads effectively.

In an ongoing effort to improve its advertising capabilities, Netflix has stated that it plans to launch an internal advertising technology platform by the end of 2025. With this initiative, clients will have access to cutting-edge tools for buying ads and increasing user engagement. At $6.99 a month, Netflix’s ad-supported subscription offers a competitive option compared to other streaming services.

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