Netflix to Launch Ad-Supported Tier Starting at $6.99 per Month
Netflix announced on Tuesday that it will launch a new ad-supported tier in the United States starting at $6.99 per month. The new tier, called “Basic with ads,” will include an average of four to five minutes of commercials each hour and won’t give users the ability to download movies and TV series. A limited number of TV series and movies will initially be unavailable due to licensing restrictions.
Commercials will be 15 or 30 seconds in length and will play before and during Netflix’s content. Brands will have the ability to prevent ads from appearing on content they deem unsavory or ill-fitting. To help advertisers understand reach, ratings company Nielsen will use its standard digital audience measurement, Digital Ad Ratings, in the U.S. beginning in 2023.
Netflix’s move to an ad-supported model follows the lead of many other streaming services, including Hulu, which has offered an ad-supported tier for awhile. Netflix has previously said that it had no plans to introduce advertising, but the company has been under pressure to find new sources of revenue as its costs continue to rise. Netflix is spending billions of dollars on original content and has taken on a significant amount of debt to finance its expansion.
The new ad-supported tier will be available in the U.S. on Nov. 15. It’s not yet clear how many people will be willing to pay for a service that includes ads, but Netflix is betting that the low price will be appealing to many users. Netflix’s standard subscription, which doesn’t include any ads, range at $9.99 to $19.99 per month.