Netflix has indeed come up with an ad-supported subscription tier. The streaming giant announced today that the new package will be arriving this November. It may be a move to undercut a similar offering from rival streaming provider Disney+ that is reportedly going to be implemented in December. The move by Netflix is also in response to its stagnating growth numbers. The streaming giant has been steadily losing subscribers as rivals are eating up the market share that was once dominated by Netflix. The cheaper ad-supported tier will hopefully attract more budget-conscious subscribers to the platform.
The ad-supported tier
The new ad-supported tier, named “Basic with Ads”, will cost $6.99 in the US. The package will also be available in Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, and the UK. The new budget tier will have four to five minutes of ads for every hour of content. The selection of shows and movies will be somewhat limited due to licensing restrictions, however Netflix is reportedly working on making affected content available. Each ad will have a duration of 15-30 seconds and will be placed before and during programs. One big limitation of the new ad-supported tier is the inability of users to download content for offline viewing. The new subscription package will need users to always be online. Another drawback is that the video quality has been capped at 720p. The limit to the video quality of content may not affect users who are primarily streaming on mobile phones or tablets, however it might have a significant impact on the quality of content viewed on bigger displays such as 4K Smart TVs - or even just your regular PC screen. Netflix describes the new package as “pro-consumer” and has dedicated a team that is tasked with finding natural breakpoints in content to insert ads. The streaming giant mentioned during the press conference that “what we do at launch will not be representative of the long-term opportunity of what the product will be.” Netflix has chosen to sell ad space at a fixed rate rather than auction out slots with hundreds of advertisers worldwide having already purchased ad space. Netflix is partnering with Nielsen to provide rating data, and the partnership will have an important role in measuring the audience of the new tier. The company has stated that it will not use the data to build user profiles outside the platform. Netflix Basic with Ads tier will be available starting November 3, 2023.
