Netflix will finally launch its new ad-supported tier for a few dollars per month beginning in November, signalling yet another sign that the once disruptive upstart streaming service has gradually evolved into a cable package by another name.
Netflix announced today that its new Basic with Ads tier will be available for $6.99 in the United States, Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, and the United Kingdom on November 3rd, 2022. Basic with Ads will give subscribers access to a large portion of Netflix’s programming in exchange for forcing them to watch an average of four to five minutes of ads per hour. But not the entire platform’s catalogue.
Due to licencing restrictions that Netflix says it is working on, a small selection of television shows and movies will be unavailable to Basic with Ads subscribers. Each Netflix advertisement will last between 15 and 30 seconds and will appear before and during programmes. Furthermore, Basic with Ads subscribers will be unable to download content to their devices, and video quality will be limited to 720p / HD.
During a press conference announcing the new tier, Netflix described it as “pro-consumer” and explained how its internal content tagging teams were tasked with finding natural breakpoints in various shows and films to place commercials in. Netflix also emphasised how Basic with Ads has evolved over the past six months in preparation for its November debut but added that “what we do at launch will not be representative of the long-term opportunity of what the product will be.” At launch, Netflix’s ad space will be sold at a fixed price rather than auctioned off, and the company claims that “hundreds of advertisers worldwide” have already purchased the majority of its initial inventory.
In the United States, Netflix announced a partnership with Nielsen to provide advertisers with rating data that will be published through Nielsen One. Nielsen’s digital ad ratings will be important in how Netflix measures its audience, and the company has stated that it will not use its data to create user profiles that lead to targeted ads outside of the platform. All of these new tools will be available to advertisers beginning in 2023.
Netflix’s ad tier comes in the wake of the streamer losing over 1 million subscribers in the US and Canada earlier this year and seeing its stock price plummet due to investor concerns that its period of rapid growth has come to an end. Despite co-CEO Reed Hastings’ well-documented opposition to including advertising, it’s clear that the recent declines have influenced his recent change of heart.
However, after years of Netflix being ad-free, the idea of paying for a version of the service that includes ads may be something that people need to be convinced of before it takes off.
