Netflix Launches a Monthly 5,500 KRW Membership with 4-5 Minutes of Commercials Per Hour: Will It Bring Back Subscribers?

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The over-the-top (OTT) video streaming service, Netflix, announced that it would launch a cheaper membership with advertisements in nine countries including South Korea on November 3 (local time).

The streaming giant introduced the “Basic with Ads” membership in the U.S., Brazil, the U.K., France, Germany, Italy, Japan, and Australia, as well as South Korea beginning 9 a.m. November 3 according to the Pacific Standard Time (1:00 a.m. Nov. 4 Korean time).

The latest membership tier will be introduced in twelve countries. On November 1, it was first introduced in Canada and Mexico, and the membership will be provided in Spain beginning November 10.

The new membership tier dubbed “Basic with Ads” charges a cheaper monthly rate than the existing Basic membership in exchange for advertisements in the content provided. The monthly subscription rate is 5,500 won in South Korea and $6.99 in the U.S.

In South Korea, Basic with Ads is 4,000 won cheaper than the Basic membership (monthly rate of 9,500 won), but viewers will have to watch an average of 4-5 minutes of commercials per hour. Viewers will be exposed to commercials 15 or 30 seconds long before and during the content. Basic with Ads subscribers will also be able to access 720p/HD quality content from their laptop, TV, smartphone, and tablet just like Basic subscribers.

But unlike other memberships, the Basic with Ads subscribers will not be able to download the content. In addition, they won’t have immediate access to some content involved in license disputes over the authority to publish ads.

Netflix is reportedly negotiating with Disney, Sony Pictures, and Warner Brothers to resolve this problem. The streaming service provider believes the Basic with Ads membership will improve revenue. In a quarterly report last month, the company mentioned positive responses from sponsors and said, “We believe that more choice, especially for more price conscious consumers, will translate into meaningful incremental revenue and operating profit over time.”

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