Netflix Adds New Feature to Ad-Supported Tier

Netflix is changing the rules on its ad-supported subscription tier that may make it easier for some users to stomach the commercial breaks. On Tuesday, Netflix advertising executive Peter Naylor spoke to advertisers and journalists about the company's new strategies rolling out in 2024. According to The Hollywood Reporter, that includes an option for users to build up "Binge rewards" which they can cash in for an occasional ad-free episode.

Naylor highlighted the importance of Netflix's ad-supported tier – especially now that the cheapest ad-free subscription package has been discontinued. He told advertisers that in the coming year, they hope to get brands more and more entangled in Netflix content, allowing them to sponsor specific movies, shows or seasons of shows. That includes the "Binge ad" – a working title for a feature that would allow users to watch an episode of their favorite show without commercial breaks. To access it, a user would need to watch a few episodes of a show in a row, then agree to watch a longer marketing message in between. In exchange, their next episode would be ad-free.

"If you're watching two or three episodes in a row – which we've all done – we say, 'Hey, let's serve this next episode commercial-free, made possible by a brand,'" Naylor explained to the advertisers, who were reportedly applauding these ideas. "Then we serve your heroic, epic, 30- to 60-second spot, your cinematic spot. At a time when more than 80 percent of our ad-supported members watch for two hours or more, this product will reward viewers and allow your brands to stand out."

Obviously the details on this "Binge ad" or "Binge rewards" model are still scarce, but the audience at Advertising Week New York were reportedly enthusiastic about it. THR notes that the crowd really went wild for the idea of "single title sponsorships," where brands would get ad placement on an entire season of an entire show. Naylor said: "We know that brands want to align with specific shows that are contextually and culturally relevant to their marketing objectives."

Naylor also assured advertisers that those kinds of tie-ins would reach the higher-paying ad-free subscribers as well. He said: "I'm in charge of the ad-supported audience that we bring to market, but this opportunity, we have the potential to reach all subscribers or viewers in a way that's going to be integrated into the show. So it's not really pushed, it's integrated... it'll have sponsors integrated into the show, it won't be 15 and 30s [15- and 30-second ad spots], and I think that's expected and it'll be part of the broadcast in a way that's natural and holistic."

These changes are on the horizon but there's no word on when and how they will be rolled out yet. Right now in the U.S., Netflix's "Standard with ads" plan costs $6.99 per month, while the "Standard" plan costs $15.49 per month and the "Premium" plan costs $22.99 per month.