Netflix Aims to Launch Ad-Supported Plan in Early 2023

While announcing its 2022 second-quarter earnings on Tuesday afternoon, Netflix shared new details about its lower-cost, ad-supported subscription tier. The streamer is partnering with Microsoft on the ad-supported plan, which it hopes will appeal to budget-conscious customers who might otherwise cancel their subscriptions.

Subscriber cancellations are front of mind for executives. Netflix lost 970,000 subscribers in Q2, a figure that beat its grim projection by over 1 million, but still marks its largest quarterly loss to date. The once-dominant platform now has 220.6 million subscribers worldwide, but Disney+ continues to close the gap with 137.7 million.

In a letter to shareholders, Netflix said it plans to launch its ad-supported plan "around the early part of 2023." It will first launch the cheaper subscription in a "handful of markets where advertising spend is significant," but the company didn't specify which countries will be included in the initial rollout.

The cost of the ad-supported plan has yet to be announced, but Netflix said the new offerings "will complement our existing [ad-free] plans."

"It makes sense now to give consumers a choice for a lower priced option with advertisements, if they desire it," the company told shareholders.

The launch of a lower-cost tier has been years in the making. Netflix is behind the curve when it comes to offering an ad-supported streaming subscription, as most of its major competitors, including Hulu, HBO Max, Discovery+, Paramount+, and Peacock all offer versions with ads. Disney+ is also jumping on the bandwagon and plans to offer an ad-supported subscription later this year.

Kirstie Renae is a writer, blogger, and Austin-based actress with a penchant for binge-watching TV with her dogs. Follow her on Twitter @KirstieRenae.