Netflix has always prided itself on never serving its subscribers with ads.

This has always been a key argument with which the video service has attempted to distinguish itself from traditional television.

But amid a significant slowdown in business, the company made a surprise U-turn in April, announcing it was working on an ad-supported -- and cheaper -- version of its subscription plan.

Roland Lindner

Business correspondent in New York.

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This will soon become reality: On Thursday, Netflix announced the launch of the cheap subscription in November in twelve countries, including Germany.

It should cost 4.99 euros per month here.

This is well below the cheapest Netflix subscription to date, which is available for 7.99 euros.

The particularly popular standard version, which allows movies and TV shows to be viewed in high definition and on multiple screens at the same time, costs 12.99 euros.

With the new, cheaper service, users should see an average of four to five minutes of advertising per hour.

Another difference from the usual subscriptions is said to be that no content can be downloaded.

In addition, some content will not be available there "for licensing reasons", although this should only apply to a very small part of the offer and not to the shows produced by Netflix itself, such as "Stranger Things" or "The Crown".

The new subscription with advertising starts a little faster than expected, in July there was talk of an introduction at the beginning of next year.

Now Netflix is ​​getting ahead of the entertainment group Walt Disney, which has recently become one of its fiercest rivals with its streaming service Disney+.

An ad-supported version of Disney+ is scheduled to start on December 8th.

cannibalization effects?

With its cheaper subscription, Netflix hopes to gain a significant new revenue stream in the form of advertising revenue and more subscribers.

This is offset by the risk of a cannibalization effect if existing customers switch to the cheap version.

Product manager Gregory Peters was recently confident that the bottom line would be to expand the circle of subscribers.

The cheaper service could bring a number of additional customers, such as those who have not yet subscribed or have canceled it.

Customers for the new subscription could also be people who used Netflix but didn't pay for it because they used passwords from other customers.

Analysts trust Netflix to make billions in sales from advertising within a short period of time.

The video service is currently under pressure.

He has now suffered two consecutive quarters of declines in his subscriber count.

This brought a long history of growth to an abrupt halt after more than a decade of steadily winning clients.

Netflix blames macroeconomic reasons such as high inflation for the slowdown, but also increased competition.

This is remarkable because the company has long been demonstratively unconcerned about the competition.

In recent years, more and more established entertainment groups like Disney have started their own streaming services, and technology giants like Apple and Amazon are also involved in the business.

Disney+ in particular has grown rapidly and has more than 150 million subscribers less than three years after its launch.

Netflix recently had around 220 million customers.

"Fan of choice for customers"

When Netflix first announced a cheaper subscription plan with ads in April, co-CEO Reed Hastings admitted he was reluctant to make the move.

He said he's always been a "big fan" of a simple, fee-funded model.

"But as much as I'm a fan of it, I'm an even bigger fan of consumer choice."

Netflix is ​​not alone, other video services also have variants with advertising or are preparing to do so.

In the case of Disney+, this happens in parallel with a price increase.

The subscription with advertising planned for December will cost $7.99 in the USA, which is as much as the regular service has been so far.

Its price is expected to rise to $10.99.

Disney has not yet announced an advertising-financed version for Germany, where the usual subscription currently costs 8.99 euros.