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Netflix is launching a $6.99-per-month version that includes four or five minutes of ads per hour and video quality that tops out at 720p. The new “Basic with Ads” option, to be available starting November 3, will also have up to 10 percent fewer movies and TV shows than the pricier tiers.
“In short, Basic with Ads is everything people love about Netflix, at a lower price, with a few ads in-between,” Netflix COO Greg Peters wrote in an announcement today.
Ads will be 15 or 30 seconds in length and will be shown before and during shows and movies, the announcement said. Basic with Ads will have an “average of 4 to 5 minutes of ads per hour,” and won’t provide the ability to download videos.
While Basic with Ads won’t have all the shows and movies available on ad-free plans, Netflix said that’s due to licensing conflicts and could change in the future. “A limited number of movies and TV shows won’t be available due to licensing restrictions, which we’re working on,” Netflix said. The announcement didn’t say which content will be missing, but it could impact up to 10 percent of shows and movies.
During a press conference, “Peters noted that libraries vary from region to region, but estimated anywhere from five to 10 percent of the Netflix library will be unavailable to people who sign up for the Basic with Ads plan,” according to Polygon.
Netflix called the new ad-supported tier “an exciting opportunity for advertisers—the chance to reach a diverse audience, including younger viewers who increasingly don’t watch linear TV, in a premium environment with a seamless, high-resolution ads experience.” In addition to the US, Basic with Ads will be available in Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, and the UK.
Netflix looks for revenue boost
Netflix revealed its intention to launch an ad-supported tier in April amid slowing revenue growth and a loss in subscribers. Competitors such as Hulu, HBO Max, and Disney+ already sell both ad-supported and ad-free options, but Netflix had long resisted the idea for its own service.
Netflix’s ad-supported plan will be $1 cheaper than Hulu’s and Disney’s and $3 less than HBO’s. Of course, price isn’t the only important factor for subscribers—which shows and movies are available on each service has a big impact on streaming users’ subscription decisions.
Netflix said it would continue to offer the Basic, Standard, and Premium plans, which cost $9.99, $15.49, or $19.99 a month. “Our current plans and members will not be impacted,” the announcement said. The three ad-free plans let users download videos for offline viewing.
Basic and Basic with Ads will both limit viewing to one device at a time, while Standard and Premium allow simultaneous viewing on two and four devices, respectively. Full HD (1080p) is restricted to Standard and Premium, while 4K is available only on Premium. Both the Basic and Basic with Ads plan will be limited to 720p. The basic plan previously supported only 480p, so it’s an upgrade for the $10 option.
Netflix has also been cracking down on account-sharing by testing an “extra member” fee and an “extra home” fee in some Latin American countries. A recent Netflix letter to shareholders said the company aims to complete a broader rollout of sharing fees next year.
In July, Netflix announced that it hired Microsoft to provide advertising technology. “To help advertisers reach the right audience—and ensure our ads are more relevant for consumers—we’ll offer broad targeting capabilities by country and genre (e.g., action, drama, romance, sci-fi). 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 today.
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