After being in the works for a while now, Netflix is finally set to launch its ad-supported subscription tier next month in 12 countries. Called ‘Basic with Ads’, it will be available in Australia, Brazil, Canada, France, Germany, Japan, Italy, South Korea, Spain, Mexico, the UK and the US.
A while back, Netflix lost a significant number of original subscribers. Since then, the company has been trying to come up with new ways to control the damage. These strategies include limiting password sharing, charging users more for sharing their accounts, and other similar tactics which encourage more people to pay. In its latest attempt to appeal to those on a limited budget, Netflix is launching an ad-supported tier for $6.99 per month.
Netflix’s new ad-supported tier to officially launch this November
Netflix disclosed that the soon-to-launch plan will include between four to five minutes of ads per hour, with 15 and 30-second commercial slots. Unlike other plans, Basic with Ads will not allow users to download content. Notably, movies arriving on the streaming service will “just have a pre-roll” as the company tries to “preserve that cinematic model”; but older films will receive a more “traditional” mix of pre-roll and mid-roll advertisements.
“We believe that with this launch we will be able to provide a plan and a price for every Netflix fan,” said Netflix COO Greg Peters in a press conference on Thursday. “The most important thing for us is that we want to offer consumers choice and for them to figure out what is the best offering for them, and that could mean that some of our existing members shift off [of ad-free subscriptions].”
The new cheaper ad-supported tier will cost $6.99 USD per month in the U.S., and will initially launch in 12 countries starting in November, the streaming giant announced on Thursday. Canada and Mexico will receive access on November 1, and two days later, the new plan will be available in the U.S., Australia, Brazil, France, Germany, Italy, Japan, Korea and the U.K. Spain will follow on November 10.
The ad tier lets users enjoy live streaming with a video quality of up to 720p/HD. It features an “average of 4 to 5 minutes of ads per hour”. The ads will be 15 to 30 seconds in length each and will play before and during shows and films. While almost all Netflix content will be included, some limited shows and movies might not be included due to license restrictions. Also, downloads are not available in the plan as well.
In today’s announcement, Netflix wrote, “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.” Netflix executives had adamantly opposed adding commercials to their service for years. They announced a change of heart in April when the company stunned Wall Street by shedding subscribers in the first quarter and predicting additional defections.
The Basic with Ads plan will also block users from downloading shows or films for offline viewing. As of the time of writing, Netflix has yet to reveal when the ad-supported plan will be expanded to other countries, including Malaysia. Subscribers to Netflix Basic With Ads will need to provide their date of birth and gender to sign up, as the company eventually plans to target ads based on that demographic data. Netflix had told ad buyers it would set frequency caps (how often an ad spot may be served to individual viewers) of one per hour and three per day per viewer, which is much lower than other ad-supported streaming-video services.