Netflix Officially Launches New Ad-Supported Subscription Tier

Netflix officially launched its ad-supported subscription tier in the United States on Nov. 3, despite previous denials it would ever happen.  In April, Reed Hastings, co-CEO of the streaming service, announced that the company was introducing the lower-cost subscription option as part of its first-quarter earnings report.

As of Nov. 1,  the company's Basic with Ads plan is available in Canada and Mexico, as well as Australia, Brazil, France, Germany, Italy, Japan, Korea, and the United Kingdom. Spain will receive the subscription option on Nov. 10. While Netflix has indicated the Basic with ads plan will evolve, the option currently costs $6.99 per month. There is a $3 difference between this and the cheapest ad-free plan. A Basic plan costs $9.99 per month, in comparison with $15.49 per month for the Standard plan and $19.99 per month for the Premium plan. Basic and Basic with Ads tiers will also have 720p video quality instead of 1080p HD on Standard and Ultra HD on Premium.

Almost four minutes of commercials will be shown per hour for the Basic with Ads subscription tier following the introduction of ads in most content, according to The Streamable. Ads will either run for 15 or 30 seconds and can appear before or during the title, according to the streamer. Customers on the Basic with Ads tier will not have access to all Netflix movies and series at launch. There was speculation at first that Netflix would hold back some of its most popular and/or original content for its ad-free customers only. Still, it appears that Netflix needs to reach licensing agreements with all its content providers, which is why some titles have been locked.

Because Netflix's original licensing agreements did not include commercials, it had to renegotiate with studios to be able to show ads before and during shows and movies. Some of the company's biggest partners, including Disney, NBCUniversal, Sony Pictures Television, Warner Bros. Discovery, and Lionsgate, have yet to reach an agreement; however, Netflix is close to a deal with WBD, according to the Wall Street Journal.

In the Basic with Ads plan, you can quickly identify which shows and movies are unavailable for streaming while searching for shows and movies. A red lock will appear in the top right corner of the title's tile when unavailable in the search menus, The Streamable reportsYou will be prompted to upgrade your plan if you click on a locked show or movie to stream it. The progress bar of a title does not appear to display ad breaks on Netflix's ad-supported tier, unlike other streaming services. You can, however, browse the timeline and pick up where you left off without having to watch another ad if you're returning to a movie or TV episode after you've already started it.

Netflix's Basic with Ads plan also allows viewing on only one approved device, just like its ad-free Basic plan. Viewers cannot skip or fast-forward through ads, as with most other ad-supported streaming services. However, consumers will be able to pause commercials whenever needed. Downloads are not available on Basic with Ads. 

Netflix will not serve ads to children's profiles, and reports over the summer indicated that the streamer would also refuse to show ads on kids' content being viewed on an adult's account. However, as of its launch, that appears to be false. Regardless of the subscription plan, Netflix's mobile games will remain ad-free. It will only be possible to see advertisements during TV episodes or movies. You cannot use Netflix if you travel to a country where Basic with Ads plans aren't available.

As you interact with Netflix, ads will be personalized according to what genres of content you watch, where you use the app, etc. Additionally, the streamer will tailor ads based on information provided by individual users. Signing up for or moving to Basic with Ads requires the customer to provide their date of birth and gender. Netflix will then use this basic demographic data to tailor its advertising.

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