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Netflix has unveiled its plans for a lower-cost ad-supported service, betting that a $6.99 per month option for consumers will help it shore up revenue in tougher economic times.

Reed Hastings, chief executive, overturned his longstanding opposition to ad support earlier this year when the company’s once-skyrocketing subscriber growth reversed, a sign of market saturation in North America.

The new ad-supported service, which will launch in November, “will increase membership and over time generate a significant stream of additional revenue and profit” in the 12 countries where it will be available next month, said Netflix Chief Operating Officer Greg Peters. , Thursday.

The advertising level will require Netflix to provide audience metrics that it has long resisted publishing, including its audience size. Starting next year, it will partner with Nielsen, the measurement service, to measure and verify how many people in the United States watched the ads.

Netflix’s subscriber warning this year has spooked investors, who have rejected streaming growth wars at all costs and are demanding to see a path to sustainable earnings growth. This led to Disney Plus announcing that it would be rolling out an ad tier in December for $7.99, while raising prices for customers who want to watch ad-free. Other streaming services including Hulu, Paramount Plus and Peacock already offer ad-supported versions.

Morgan Stanley estimates that Netflix could raise up to $3 billion a year from advertising in 2026, but expects most of that to come from subscribers negotiating ad-free membership levels. .

Learn more about Netflix’s ad-supported option here.

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