Netflix will launch a cheaper option with adverts next month after its first drop in subscribers in more than a decade.
In Australia the new plan will cost about a third less than the video streaming service's current entry-level, ad-free option, at $6.99 a month.
The plan, set to launch on November 3, will have four to five minutes of ads per hour, and users will not have the option to download shows and movies to watch offline. A "limited" number of programmes will not be available.
Netflix's 15-year-old streaming service decided on a new direction six months ago after reporting its first decline in subscribers in more than a decade.
A captive lockdown audience led to a surge in subscribers in 2020 but the stream giant's growth has since stalled, recording its weakest annual growth in 2021.
Netflix lost 1.2 million subscribers in the first half of the year, leaving it with nearly 221 million.
It is also facing stiff competition as more rivals enter the market, including Amazon, Apple and Disney, as well as free streaming platforms like ABC's iview and SBS (which also has ads).
Then there is account-sharing, with Netflix putting the number of households watching for free at about 100 million worldwide.
"Account-sharing as a percentage of our paying membership hasn't changed much over the years, but, coupled with the first factor, means it's harder to grow membership in many markets — an issue that was obscured by our COVID growth," Netflix said in a letter to its shareholders earlier this year.
The service's stock price also took a hit, wiping out up more than $US200 billion ($317 billion) in shareholder wealth in the past 11 months.
Shares rallied after Thursday's announcement, but still have lost about two-thirds of their value after peaking last November when the service was still growing.
Inflation has also put households under pressure to reign on discretionary spending like video-streaming.
ABC/AP
