The thing about free TV is that, while it has ads, it’s … free. Netflix with ads, however, will not be free, the company announced today when it finally provided details about the long-anticipated ad-supported version of the most popular streaming long-form video platform on the planet.
The new Netflix tier is called Basic With Ads, and it’s launching in 12 countries in November for $6.99 US. Basic with Ads joins existing Basic, Standard, and Premium plans, and includes:
- Almost all of Netflix in terms of shows, but not all
- Some movies and TV shows won’t be available due to licensing restrictions
- 720P video quality, not 1080P or 4K
- Permitted use on one device at a time (can be a phone, tablet, computer, or TV)
- 4-5 minutes of ads per hour which will play both before and during content
- 15-30 second unskippable ad units (you also can’t fast forward during ads)
- Ads will be targeted by country and type of show you’re watching, but also what Netflix knows about you (for example: age, gender, location, and what you watch on Netflix)
- Ads will not be shown on kids’ profiles
- No ads will show during Netflix games
- No ability to download shows for offline viewing, like on a flight or trip to the no-internet-here cabin
Genuine question: will the number of people watching on kids’ accounts grow as a means to avoid ads? I guess we’ll see. “We’re confident that with Netflix starting at $6.99 a month, we now have a price and plan for every fan,” Greg Peters, Netflix Chief Operating Officer and Chief Product Officer said in a statement.
“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.” It’s probably true that Netflix has a price and plan for most fans, but not all if you want good old-fashioned free TV.
Granted, that’s rare today given that most people pay either for cable, satellite, or streaming services — or some combination of those three — plus of course internet access fees. But some still get terrestrial TV for free: in the UK, for example, people can get 70 free-to-air standard channels, 15 HD channels and around 30 radio services over digital terrestrial TV. There are hundreds of TV stations still broadcasting over the air in the US as well.
For streamers or those considering it, $7 is not onerous, and probably neither is 4-5 minutes of ads per hour. And the ability to watch what you want when you want is also worth something. Of course, as we’ve seen with other media, the percentage of time and space allocated to advertising seems to inevitably creep upwards.
The question now is: will other streaming services like Disney+ and HBO Max start to follow suite with their own cheaper ad-supported services? Basic with Ads will be available in these countries at launch: Australia , Brazil , Canada , France , Germany , Italy , Japan , Korea , Mexico , Spain , UK , USA.
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What was once believed unthinkable is now a reality: Netflix with ads is here. The streaming giant unveiled “Basic with Ads,” its much anticipated ad-supported subscription plan, on Thursday. The new tier will cost $6.99 a month in the US and be available Nov. 3 in the US, Canada, Australia, Brazil, France, Italy, Germany, Japan, Korea, Mexico, Spain and the UK.
The company said that “current plans and members will not be impacted” and that “Basic with Ads complements our existing ad-free Basic, Standard and Premium plans.” The new option will feature much of what’s available with Netflix’s current $9.99 a month Basic plan, but will include an average of four to five minutes of commercials per hour.
Those ads will be 15 or 30 seconds in length and will play before and during TV series and movies. Netflix (NFLX) noted that it will offer broad targeting capabilities by country and genre to help “advertisers reach the right audience — and ensure our ads are more relevant for consumers.”
“Advertisers will also be able to prevent their ads from appearing on content that might be inconsistent with their brand (e.g. sex, nudity or graphic violence),” Netflix said. The company said that it is working with ratings tracker Nielsen in the US in 2023 “to enable advertisers to understand how Netflix can reach their target audience.”
The debut of the ad-supported subscription plan is a momentous moment in Netflix 25-year history. CEO Reed Hastings said in April that the company was open to adding commercials to the service, sending shock waves through the media and advertising industries as Hastings had for years been adamant about not putting ads on the platform.
“We … are advertising free,” Netflix said in a letter to shareholders in 2019. “That remains a deep part of our brand proposition.” But after a nightmarish 2022, the platform can no longer stick to that approach. In April, Netflix disclosed that it lost subscribers for the first time in more than a decade. Following that news, the stock tumbled, and the company lost billions in market cap, hundreds of employees were laid off and doubts ran rampant about the platform’s future, raising questions about the viability of the entire streaming marketplace.
In July, Netflix announced that it will partner with Microsoft (MSFT) to enhance sales and technology for this new subscription plan. Ultimately, Netflix needs more revenue and ads is one way to achieve that. This doesn’t mean all subscribers will have to watch commercials since existing plans will stay ad-free, but there will now be a choice between a cheaper ad-supported plan and a premium one. Ultimately, the Netflix of the future is bound to look different than the Netflix users have come to know.