Netflix will launch its ‘Basic with Ads’ subscription level in November, the company announced on Thursday.
At $6.99 a month in the United States, the new ad-supported tier is less than half the cost of the streamer’s standard subscription, opening the door to interested consumers on a tighter budget, according to Netflix COO Greg Peters.
“We believe that with this launch we can offer a subscription and a price for every Netflix fan. The most important thing for us is that we want to give consumers choice and they can find out what the best offer is for and that could mean that some of our existing members are dropping out [of ad-free plans]Peters told reporters at a virtual press conference following Thursday’s announcement.
He also said the new offering has the potential to benefit Netflix financially.
“From a revenue perspective, we’re relatively neutral or agnostic. We’ve generally set up so that revenue, subscriptions plus ad revenue is neutral to positive for no-ads subscriptions.”
This new level brings Netflix, a pioneer in the rise of streaming platforms, up to date with its competitors such as Hulu, who have offered an ad-supported level from the start.
What we know about the ‘Basic With Ads’ tier user experience
Like the competing platforms that offer ad-supported subscriptions, Netflix says the service will have about 4 to 5 minutes of ads per hour in the form of 15- and 30-second commercial spots. New movies will only have pre-roll ads to “keep that cinematic model,” but older movies and TV shows will have limited ads everywhere.
According to The Hollywood Reporter after watch a demo of the new layer, the ad-supported subscription will “look familiar to anyone who has streamed content on an ad-supported platform.” The ad starts playing as soon as the user presses the “watch” button, with a box in the corner designating it as an ad and counting down to the end.
Unlike Netflix’s other subscription tiers, Basics with Ads users don’t have the option to download movies or TV shows for offline playback. Additionally, some titles may not be available immediately at launch due to licensing issues.
According to The Hollywood Reporter, the ad-supported tier will debut November 1 in Canada and Mexico; the service will reach the US, UK, Australia, Brazil, Korea, Japan, France, Germany and Italy a few days later on November 3. However, subscribers in Spain will have to wait until November 10.
A launch date for the “Basic with Ads” tiers in other countries is still TBD.