Netflix’s much-anticipated lower-cost subscription streaming tier with ads is set to launch this November.
The streaming giant on Thursday officially disclosed timing and other details – such as the $6.99 per month price tag for U.S. users – for its first jump into the ad-supported streaming space. The launch next month, on November 3, comes quick, as Netflix just disclosed plans for an ad-supported tier earlier this year and was initially targeting a 2023 timeline.
Currently, Netflix’s cheapest plan without ads costs $9.99 per month. The $7 per month price for Netflix with ads is also $1 cheaper than Disney’s forthcoming Disney+ tier with ads – which will be priced at $7.99 per month and debut roughly a month after Netflix on December 8.
Details have been trickling out since Netflix announced it would wade into the advertising sphere and today confirms some details in earlier media reports. Here’s what we now officially know.
The lower cost tier is being dubbed as “Basic with Ads” and will be available in 12 countries including the U.S., Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, and the U.K.
Different from its premium subscription tiers with no ads, video quality on the ad-supported tier will be up to 720p/HD (on both Basic with Ads and Basic without ads plans), and Netflix is starting with an average of four to five minutes of ads per hour.
Users of the ad-supported tier also won’t get access to all Netflix content. The streamer said “a limited number of movies and TV shows won’t be available due to licensing restrictions, which we’re working on.” Ad-supported tier users also won’t be able to download titles.
As Netflix looks to expand options for customers, it’s also building a new revenue stream and creating opportunities for advertisers that want access to reach its audience in a premium environment. Microsoft was already named as a technology and ad sales partner, but today Netflix confirmed a trio of other companies it’s tapping in the advertising space. That includes previously reported partnerships with DoubleVerify and integral Ad Science to verify the viewability and traffic validity of ads on Netflix, starting in the first quarter of 2023.
Notably, Netflix is also leveraging Nielsen – specifically utilizing the company’s Digital Ad Ratings (DAR) in the U.S. Use of Nielsen won’t be immediate, as Netflix said those capabilities for targeting will become available “sometime in 2023,” eventually being reported through Nielsen ONE Ads.
Additionally, the SVOD leader shared some details on ad formats – which at launch will be 15 or 30 seconds long and will play before and during shows and films. In the announcement, Greg Peters, chief operating officer and chief product officer, said Netflix will offer broad targeting capabilities, including by country and genres.
“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),” Peters noted.
He also said that the speedy launch wouldn’t have been possible without the team’s hard work “or Microsoft’s extraordinary partnership.”
Netflix is launching an ad-supported tier at a time when streaming viewership continues to rise, having surpassed cable in the U.S. for the first this July. It’s also in a macro environment where some consumers are becoming more price conscious. Recent survey data from Samba TV and HarrisX found nearly half (46%) of current Netflix subscribers would consider shifting to an ad-supported model – with 5 minutes of ads per hour the maximum amount that most were willing to consider. The analysis also concluded there’s a large opportunity to bring in a new audience via ads that isn’t currently reached or monetized by Netflix today. In a survey of 1,200 non-Netflix subscribers, 92% report already watching ad-supported streaming platforms.
In announcing the launch, Netflix’s Peters expressed confidence for uptake, with interest from both consumers and advertisers.
“We’re confident that with Netflix starting at $6.99 a month, we now have a price and plan for every fan,” Peters stated. “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.”