Netfilx's new ad-supported plan will exclude 5%-10% of movie and TV titles depending on country because of rights restrictions from studios.
will launch in the U.S. on Nov. 3 at 9 a.m. PT, priced at $6.99 per month, the company announced. The cheaper plan will be available in 12 countries: Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, the U.K. and the U.S. It will first roll out in Canada and Mexico on Nov. 1.
The about-face by Netflix to embrace ads, after insisting commercials were antithetical to its ad-free value proposition, comes as the company saw it subscriber base shrink in the first half of 2022 amid fierce competition and market saturation. Netflix Basic With Ads is an attempt to reach a new cohort of price-sensitive consumers — and keep the company competitive with rivals that also offer ad-supported options.
At launch, ads will be either 15 or 30 seconds long , which will play before and during TV shows and films. The Netflix tier with ads will serve an average of 4 to 5 minutes of ads per hour, roughly in line with the ad loads of Peacock and Disney+ with ads. New-release movies will include only pre-roll ads to “preserve the cinematic experience,” Peters said.
Netflix had been asking for a $10 million minimum commitment in annual ad spending from agencies, according to industry sources, and was seeking to lock in initial ad buys by Sept. 30. The streamer has told ad buyers it expects to have about 4.4 million customers worldwide on its ad-supported plan by the end of 2022. Peters said Netflix will provide a forecast when the company reports third-quarter 2022 earnings on Tuesday, Oct. 18, after the market closes.
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