Netflix is joining other major streaming services and offering a cheaper, ad-supported plan beginning on Nov 3 in the US, according to the company.

Under the new plan, which will cost US$6.99 per month, viewers will see 15- to 30-second advertisements before and during their program, according to an Oct 13 news release from the company.

The plan is US$3 cheaper than the company’s current “Basic plan,” which costs US$9.99 per month. The most expensive subscription is Netflix’s “Premium” plan at US$19.99 per month.

The California-based company - the most popular of all the streaming services, with more than 220 million paid subscribers - had long resisted offering an ad-supported plan, according to Indiewire.com.

Other notable streaming platforms already offer discounted, ad-based subscriptions. Users can subscribe to HBO Max for US$9.99 per month with ads or US$14.99 per month without ads, and viewers can choose a US$7.99 per-month, ad-based subscription on Hulu or pay US$14.99 per month to avoid ads.

Disney+ plans to launch a basic, ad-supported subscription tier in December, according to the company.

Netflix’s chief operating officer Greg Peters told reporters during a call on Oct 13 that he believed the company’s new, ad-based option would help grow membership over time and build revenue for the company.

Netflix lost around 970,000 subscribers during a three-month period ending June 30 - fewer than the two million it had previously projected to lose, according to CNBC.

Peters told reporters that he felt the more affordable plan would be a good option for consumers who want to pay less for the service.

“In the grand scheme of things, it’s a very pro-consumer and consumer-friendly approach to be able to offer the wide variety of entertainment that we have at a lower price for (consumers), with the offset of this quite limited and ideally quite thoughtfully placed ad experience,” he said.

Among the streaming service’s three most popular TV shows are Stranger Things Season 4, Squid Game, Dahmer: Monster: The Jeffery Dahmer Story and Bridgerton Season 2, according to the company.

Some viewers expressed their frustration with Netflix’s announcement on social media.

“Bye Netflix,” a user tweeted. “Your shows are not worth paying on top of the ads, you (don’t) even have a proper navigation system on your site.”

“It will be time to cancel Netflix if I have to watch ads,” another person tweeted.

Netflix’s revenue grew 9% year-over-year in the second quarter of 2022, according to a letter sent to shareholders in July, but the streaming service faces fierce competition from other streaming platforms.

“Even though video streaming is viewed to be a value, leisure thing to do, households have way too many different types of streaming from formidable competitors of Netflix besides them,” Kenneth Leon, research director at CFRA Research, an independent research and analytics company, told the LA Times. “So we see the risk is really recession.”

The company projected that it would add one million subscribers in the third quarter of 2022, compared with 4.4 million during the previous year’s quarter, according to the letter to subscribers.

On Oct 13, Netflix’s stock price closed at US$232 per share after opening at US$212 per share.

 - TNS