Netflix With Ads Is Here

February 25, 2023 appsky advertising, apple, basic, inc., netflix, netflix.com

Angela Lang/CNET

    Whether you see it as the end of an era or the start of a new one,?Netflix?will run its first advertising ever on its service today. Tuesday marks the launch of Netflix’s?cheaper, ad-supported tier?in two initial countries, with 10 more countries (including the US) coming within about a week.?
    The world’s biggest subscription video service,?Netflix?grew into a behemoth partly thanks to its strategy of making shows and movies available in ad-free binges. Back when traditional, commercial-packed TV was the main way people watched, Netflix pitched itself as the alternative that wouldn’t interrupt the flow of your programming with advertising, nor would it make you wait week to week to watch your next episode. Building itself into a giant by playing the contrarian, Netflix spent years dismissing the notion of advertising on its service.?
    Fast forward to today: Netflix is the one behind the times. Nearly all of Hollywood’s major media companies have launched their own streaming services to take on Netflix, including?Apple TV Plus,?Disney Plus,?HBO Max,?Peacock?and?Paramount Plus. And as they rolled out, they introduced features that have now become industry norms that customers expect, including an option to pay less if you watch ads.?
    Nearly every one of Netflix’s new competitors offers a cheaper tier with advertising. (The lone holdout besides Netflix,?Apple TV Plus, is reportedly considering ads, too.) Now Netflix, grappling this year with its first membership declines in a decade, has reversed course to add advertising as well.?
    Here are the biggest things to know.?

     Does Netflix have ads?
    Starting Tuesday, Netflix will begin running ads alongside its streaming shows and movies for the first time, but only in select countries and only if you subscribe to a new tier called Basic with Ads. If you want to keep watching Netflix without advertising, the service will still have the same ad-free memberships.?
    When is Netflix adding advertising??
    The new Basic with Ads membership option will go live in November across 12 countries:?

Tuesday: Canada and Mexico
Thursday: The US, Australia, Brazil, France, Germany, Italy, Japan, South Korea and the UK
Nov. 10: Spain

On each of these launch days, Basic with Ads will become available starting at 9 a.m. PT, regardless of the time zone of the country where it is launching. (That means in Australia, Japan and South Korea, the launch of Basic with Ads will actually be Friday local time.)

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    Not long after the company first indicated publicly it was open to an ad-supported tier in April, it said in July it was “targeting to launch … around the early part of 2023.” But then?reports said?Netflix moved up the launch date?to better compete with Disney Plus’ own ad-tier launch in December.?
    How much will the ad-supported tier cost??
    Starting Tuesday at 9 a.m. PT, Netflix’s Basic with Ads will become available in Canada and Mexico:?

The Canadian ads-supported tier is C$6 a month, which is C$4 cheaper than its Basic ad-free plan there.
The Mexican ad-supported plan is $99 (Mexican) a month, which is $30 (Mexican) cheaper than its Basic ad-free plan in that country.?

    But when it launches in the US Thursday, Basic with Ads will be $7 a month, saving $3 monthly compared with the cheapest ad-free membership. ?
    By comparison, in the US:

Disney Plus will start charging $8 a month for its ad-supported subscription and $11 a month for its ad-free membership starting Dec. 8. (For now, it charges $8 a month for ad-free streaming.)?
Hulu?is $8 a month with ads and $15 a month ad-free.?
Paramount Plus?charges $5 for its tier with advertising, and $10 for the ad-free version.?
HBO Max?is $10 a month if you watch with ads or $15 a month to strip out all commercials.?
Peacock lets you stream a portion of its catalog free with advertising, while its paid subscriptions — which unlock its full library — are $5 a month with ads and $10 a month without ads.?

Will Netflix increase prices as it launches Basic with Ads??
    No, Netflix isn’t increasing the prices of its existing plans.?
    It’s a reasonable question, though:?Disney Plus is going to hike prices?for its existing ad-free membership when it launches an ad-free tier Dec. 8.?
    In the past, Netflx has bumped its prices higher roughly every two years, but lately it has sped up the pace: Its last price hike in the US was announced in January, which was barely more than one year after the previous one. This quicker cadence may feel like a warning of more hikes to come, but every time Netflix raises prices, it also has to deal with what’s known as churn, or the rate of cancellations. Generally, Netflix has characterized its churn after a price increase as manageable, calling it an “adjustment period” of “slightly higher churn.” But with Netflix so spooked by its existing membership declines so far — including some cancellations this year that were prompted by the latest price increase — the company is unlikely to tempt fate by raising prices again so soon.?
    Last month, Netflix confirmed its existing tiers will stay the same price.?
    What are all the plans and their prices in the US??
    Until now, Netflix had?three tiers of subscriptions at different prices, all of them ad-free: Basic, Standard and Premium. Starting Thursday in the US, Netflix will have four tiers:?

$7-a-month Basic with Ads, which matches the features of the ad-free Basic plan described below but with one big exception: The ad-supported, cheaper plan doesn’t let you download to watch offline.?
$10-a-month Basic, which allows you one simultaneous stream, one device with downloads and 720p HD quality video.?
$15.50-a-month Standard, which allows you two simultaneous streams, two devices with downloads and 1080p HD video quality.
$20-a-month Premium, which allows you to have four simultaneous streams, four devices with downloads and video quality in 4K and HDR.

Are the current plans changing in any way with the launch of ads??
    The Standard and Premium plans are unchanged.
    The ad-free Basic tier has one change: With the launch of Basic with Ads, the ad-free Basic tier is getting bumped up to a higher video image quality — both Basic and Basic with Ads are getting 720p HD quality video, after HD was previously reserved for Standard subscriptions.?
    How many ads will I have to watch on Netflix??
    Netflix said it will average no more than four to five minutes of advertising each hour. Ad breaks will happen both before your program starts (known as preroll) and in the middle of your programming at a scene change (known as midroll). Netflix is aiming to have “some very tight frequency caps so that members don’t see the same ad repeatedly,” Chief Operating Officer Greg Peters said.

    By comparison, when HBO Max launched its ad-supported tier last year, it said its ad load would be less than four minutes per hour. Disney Plus has said that it’s aiming to average four minutes of advertising per hour for its coming ad-supported tier, too. And Peacock, when it was preparing for its launch, said its ad-supported tiers would have five minutes of ads per hour.?
    Traditional TV networks’ ad load can reach up to 15 minutes an hour.?
    Can I skip or fast-forward through ads??
    No. You can pause during an ad break, but you can’t skip or fast-forward through advertising on Netflix.?
    Is the complete Netflix library available on the Basic with Ads plan??
    No. The ad-supported tier doesn’t necessarily paywall any parts of the catalog, but a “limited” number of titles won’t be available to watch because of licensing restrictions, Netflix said. The amount of titles locked out from ads-supported members is roughly 5% to 10% of the library, varying by country.?
    Can I download to watch offline with Basic with Ads??
    No. Basic with Ads membership cannot download to watch offline at all.?
    How do I sign up for a Basic with Ads plan?
    Once the new tier is live in the country where you live, you can either sign up for it as a new member or switch your existing subscription to the cheaper tier.?
    If you’re a new Netflix member, you can sign up for the Basic with Ads plan as you would for any other Netflix plan as soon as the new tier goes live in your country.?
    If you are already a Netflix subscriber, you can switch your plan to Basic with Ads by logging into your Netflix account. By clicking on “Plan Details,” you can select “Change Plan.” If you don’t see the option for Basic with Ads, it’s possible that you have Netflix through a third-party billing partner or with a package — you’ll need to contact that provider to confirm whether the ad-supported plan is available.?

    If you still can’t find Basic with Ads, you may also be using an incompatible device; there are a small number of devices that don’t support Basic with Ads that otherwise will play ad-free Netflix.?
    Will children be served ads on the new plan??
    If they watch on a Kids profile, they won’t — Kids profiles won’t run any advertising.?
    What’s are the different prices for Basic with Ads in each country?
    The monthly price for Basic with Ads varies depending on where you live:

Australia: AU$7 a month
Brazil: $18.90 reals a month
Canada: C$6 a month
France: 6 euros a month
Germany: 5 euros a month
Italy: 5.50 euros a month
Japan: 790 yen a month
Mexico: $99 (Mexican) a month
South Korea: 5,500 won a month
Spain: 5.50 euros a month
UK: ￡5 a month

To verify the pricing of all tiers in your country, Netflix’s plans and pricing page has a drop-down menu at the top that lets you choose which country’s prices to display.?