Netflix Announces Launch Date and Limits of Cheaper Ad-Supported Tier

By Daniel S. Levine

Netflix finally announced the details of its ad-supported tier. The new "Basic With Ads" plan will launch at just $6.99 and will be available on Nov. 3 at 9 a.m. ET in the U.S. The service will also be available in 11 other countries. The streamer said the plan will not impact subscribers who already have the ad-free Basic, Standard, and Premium plans.

The Basic With Ads plan offers many of the same features as the ad-free services, but with one obvious change. There will be four to five minutes of commercials per hour, and video quality will only be up to 720p/HD. Subscribers will also not be allowed to download titles.

Not everything will be available to Basic With Ads subscribers either. As Netflix executives previously stated, some movies and TV shows will not be available due to licensing restrictions that keep them from being shown with commercials. The streamer said it is working on the issue. Depending on the country, about 5% to 10% of titles will be unavailable to Basic With Ads subscribers, Netflix chief operating officer Greg Peters told reporters, notes Variety.

Netflix was famously against commercials for years, touting it as one of the big differences between it and its competitors. However, after its subscriber base shrunk in the first half of 2022, the streamer realized it would have to start offering a cheaper tier to compete with Disney+, Peacock, HBO Max, and others.

The new plan offers "an exciting opportunity for advertisers – the chance to reach a diverse audience, including younger viewers who increasingly don't watch linear TV, in a premium environment with a seamless, high-resolution ads experience," Peters told reporters. Peters predicted that few Netflix subscribers will downgrade their pricey plans. "From our perspective, we're not trying to steer people to one plan or the other," he said.

The Basic With Ads plan will also be available in Canada, the U.K., Brazil, Australia, France, Germany, Italy, Japan, Korea, Mexico, and Spain. Individual commercials will be between 15 and 30 seconds long (and 20 seconds long in Spain). Peters said there will only be commercials before new-release movies begin to "preserve the cinematic experience."

The new service will also allow Netflix to mine even more data about subscribers' viewing habits. Subscribers need to include their birth and gender at sign-up as the company plans to target ads using demographic data. "Basic with Ads also represents an exciting opportunity for advertisers – the chance to reach a diverse audience, including younger viewers who increasingly don't watch linear TV, in a premium environment with a seamless, high-resolution ads experience," Netflix said in a statement.

The Nov. 3 launch date will also give Netflix a leg up on Disney. The ad-supported Disney+ plan will be available on Dec. 8. That will cost $7.99 per month, the current price of the ad-free version. The ad-free Disney+ will be renamed Disney+ Premium and will cost $10.99 per month. 

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