Netflix Ads Are Coming to a Cheaper, $7-a-Month US Subscription on Nov. 3

January 28, 2023 appsky apple, basic, inc., netflix, netflix.com, tv

    Netflix is the world’s biggest subscription video service by subscribers, but it’s struggled with a drop in membership this year.
    Angela Lang/CNET

What’s happening

    Netflix is rolling out a cheaper membership that’ll run four to five minutes of commercials each hour.

Why it matters

    With an explosion of streaming options colliding with tight budgets in a lot of households, price-sensitive viewers now have an option to watch Netflix while saving at least $3 a month.

What’s next
    The new tier launches in most places on Nov. 3, about one month before Disney Plus rolls out its own ad-supported, $8-a-month tier.

    Netflix?is adding ads. The streaming giant will launch a $7-a-month, ad-supported membership tier called Basic with Ads in early November in the US and 11 other countries, Netflix said Thursday in a news post. ?
    The new Basic with Ads memberships will go live first in Canada and Mexico on Nov. 1, then the tier will launch on Nov. 3 in the US as well as Australia, Brazil, France, Germany, Italy, Japan, South Korea and the UK. Finally, it’ll roll out in Spain on Nov. 10. Basic with Ads will go live at 9 a.m. PT on each launch day.
    All of Netflix’s current subscriptions will remain mostly unchanged, including no increases to their prices. In one of the only changes to its existing options, the cheapest ad-free plan — $10-a-month Basic — will now get 720p HD quality video. Previously, HD-quality streams were reserved for the $15.50-a-month Standard membership. Now Standard gets 1,080p HD quality, while the $20-a-month Premium tier has access to 4K and HDR.

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    Commercials on Netflix, like on a lot of streaming services, will indicate how long the ad break lasts.?
    Netflix
    The new Basic with Ads will average about four to five minutes of commercials per hour, and it won’t allow subscribers to download anything to watch offline. The ad-supported tier also won’t necessarily paywall any parts of the catalog, but a “limited” number of titles won’t be available to watch because of existing licensing restrictions, Netflix said.?
    The company will have “some very tight frequency caps so that members don’t see the same ad repeatedly,” Netflix Chief Operating Officer Greg Peters said during a call with press previewing the news.?
    Netflix spent years rejecting the idea of advertising on its service. But after it lost members earlier this year for the first time in a decade, the company made an about-face to embrace ads. Netflix’s hope is that a cheaper tier, which can charge you a little less each month by making money off the commercials you watch, will help it win back customers.?
    Netflix is changing its tune because of intensifying competition. In the last three years, a so-called?streaming war has brought about a wave of new services to take on Netflix, including?Apple TV Plus,?Disney Plus,?HBO Max,?Peacock and?Paramount Plus. Nearly all of Hollywood’s major media companies have poured billions of dollars into their own streaming operations, all chasing what seemed to be unstoppable subscriber growth at Netflix. For people like you, this flood of streaming options has complicated how many services you must use (and, often, pay for) to watch your favorite shows and movies online.?

See also

10 Ways to Save Money on Streaming
How to Cut the Cable TV Cord in 2022
See More at Streaming TV Insider

    Nearly every one of Netflix’s new competitors offers a cheaper or free tier with ads. (The lone holdout besides Netflix,?Apple TV Plus, is reportedly considering advertising now too.)
    Advertising isn’t the only U-turn Netflix is making. It plans to charge new fees for password sharing next year, with some already being tested in Latin America.?