Starting in November, Netflix will finally roll out its new ad-supported tier for just a few bucks a month, yet another sign that the onetime disruptive upstart streaming service has slowly become a cable package by another name.
Netflix announced today that its new Basic with Ads tier is slated to launch on November 3rd, 2022, for $6.99 in the US, Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, and the UK. In exchange for making you watch an average of four to five minutes of ads per hour, Basic with Ads will give subscribers access to a large swath of Netflix’s programming. Not the platform’s full catalog, though.
A small selection of television shows and movies will not be available to Basic with Ads subscribers due to licensing restrictions that Netflix says it’s currently working on. Each of Netflix’s ads will run anywhere from 15-30 seconds, and will be placed before and during programs. Additionally, Basic with Ads subscribers will not be able to download content onto their devices, and video quality is capped at 720p / HD.
During a press conference about the new tier, Netflix described it as “pro-consumer” and detailed how its internal content tagging teams have been tasked with finding natural breakpoints in different shows and films to place commercials in. Netflix also emphasized how Basic with Ads has come together over the past six months in the buildup to its debut this November but noted 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 with a fixed-price model rather than being auctioned off, and Netflix’s says “hundreds of advertisers worldwide” have already purchased most of its initial inventory.
In the US, Netflix said it will partner with Nielsen to provide advertisers with ratings data that will be published via Nielsen One. Nielsen’s digital ad ratings will play an important role in how Netflix measures its audience, and Netflix said that it will not be using its data to build user profiles that lead to targeted ads outside the platform. All of these new tools will be rolling out to advertisers over the course of 2023.
Netflix’s ad tier arrives in response to a sudden slump for the streamer, which lost over 1 million subscribers in the US and Canada earlier this year and has seen its stock price plunge in response to investor concerns that its period of rapid growth has ended. Despite co-CEO Reed Hastings’ well-documented opposition to the idea of including advertising, it’s clear that his recent change of heart has been spurred by the recent declines.
But after years of Netflix being ad-free, the concept of paying for a version of the service that has them might be something that people really need to be sold on before it takes off.
Correction and update October 13th, 5:20 PM ET: Netflix’s ad tier will include an average of four to five minutes of ads per hour, not four to five ads per hour, as an earlier version of this story misstated. Additionally, an earlier version of this story said Netflix explained it may change the price of its ad-supported package. In fact the statements were in reference to Netflix’s pricing applied to advertisers. We regret the error. This story has also been updated with details around Netflix’s partnership with Nielsen.