Netflix to Launch $6.99 Basic Ad Tier in November

Netflix
(Image credit: Netflix)

Netflix today announced the details of its long-awaited ad supported subscription plan which will launch on Nov. 3 in the U.S.

“Basic with Ads” will cost $6.99 per month and will also be available in Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, the U.K. The service will also become available in the U.K. on Nov, 3; Canada will get first dibs when it launches there on Nov. 1.

The company announced its intention to launch an ad-supported version of its plan last summer after disappointing quarterly results that showed its first net decline in subscriptions. "Allowing consumers who would like to have a lower price and are advertising-tolerant get what they want makes a lot of sense," said Reed Hastings at the time.

The move is part of a multi-pronged effort to improve Netflix's bottom line position, which also includes a campaign to reduce or eliminate password sharing as well, with tests ongoing in Latin America currently. 

For subscribers of “Basic with Ads," most current programming as well as the ability to personalize viewing preferences will remain the same and subscribers will still retain the ability to cancel at any time. However, the new subscription tier will include an average of 4-5 minutes of ads per hour and subscribers will not be able to download titles. Ads will average 15-20 seconds in length and play before and during programs. 

Netflix also said “a limited number” of movies and TV shows will be unavailable due to licensing restrictions. Also, like its current Basic plan, video quality will be limited to 720p/HD.

“In short, Basic with Ads is everything people love about Netflix, at a lower price, with a few ads in-between,” the company said in announcing the plan. 

Netflix says the new “Basic with Ads” will also provide more flexible advertising options, that feature a “seamless, high-resolution ads experience.” It will allow advertisers to micro-target audiences down to country and genre (action, sci-fi, etc.) as well as allow them to prevent their ads from appearing on content inconsistent with their brand (such as nudity, profanity or graphic violence). 

The company has partnerships with DoubleVerify and Integral Ad Science to verify the viewabiity and traffic validity of their ads. To help advertisers understand how Netflix can reach their target audience, Nielsen will use its Digital Ad Ratings (DAR) in the U.S. This will become available sometime in 2023 and eventually be reported through Nielsen ONE Ads.

“Basic with Ads will launch just six months after we first announced the option of a lower priced ads plan,” the company said. “None of this would have been possible without our team’s hard work or Microsoft’s extraordinary partnership. The switch from linear is happening at an ever increasing speed, with streaming now surpassing broadcast and cable in the U.S. We’re confident that with Netflix starting at $6.99 a month, we now have a price and plan for every fan.” 

"While it’s still very early days, we’re pleased with the interest from both consumers and the advertising community — and couldn’t be more excited about what’s ahead. As we learn from and improve the experience, we expect to launch in more countries over time." 

Tom has covered the broadcast technology market for the past 25 years, including three years handling member communications for the National Association of Broadcasters followed by a year as editor of Video Technology News and DTV Business executive newsletters for Phillips Publishing. In 1999 he launched digitalbroadcasting.com for internet B2B portal Verticalnet. He is also a charter member of the CTA's Academy of Digital TV Pioneers. Since 2001, he has been editor-in-chief of TV Tech (www.tvtech.com), the leading source of news and information on broadcast and related media technology and is a frequent contributor and moderator to the brand’s Tech Leadership events.