Netflix’s ad-supported tier will launch on November 3: £4.99/month subscription will see 30-second-long adverts play DURING films and TV shows
- Netflix’s new ad tier will launch in 12 countries including the UK on November 3
- Subscribers to the tier will see an average of four to five minutes of ads per hour
- ‘Basic with Adverts’ will be £4.99 a month – £2 less than its cheapest ad-free tier
Netflix has announced that its new ad-supported tier will cost £4.99 per month and be arriving in just three weeks’ time.
Called ‘Basic with Adverts’, the new tier will launch for users in 12 countries, including the UK and the US, on November 3.
Basic with Adverts will show an average of four to five minutes of adverts per hour, with each advert 15 or 30 seconds in length.
The ads will play before and even during content, which could infuriate viewers if they interrupt a particularly dramatic or suspenseful moment of their show.
At £4.99 per month, Basic with Adverts is £2 cheaper than the lowest-priced ad-free tier (Basic), which costs £6.99 a month.
Netflix currently has three subscription tiers – Basic, Standard and Premium – none of which have adverts.
The streaming giant said none of these tiers will change due to the launch of the new ad-supported tier.
Basic with Adverts will cost £4.99 a month in the UK and will launch on November 3 at 4pm, according to the streaming giant (file photo)
NETFLIX’S UK PRICES
– Basic with Adverts: £4.99 (launching November 3)
– Basic: £6.99 (one screen at a time)
– Standard: £10.99 (two screens at a time, HD available)
– Premium: £15.99 (four screens at a time, Ultra HD available)
More info: Netflix.com
The new tier also includes a couple of other restrictions compared to the paid version of Netflix – firstly, it won’t offer users the ability to download films and TV shows.
Secondly, some films and TV series won’t be available due to licensing restrictions, which Netflix said it is currently working on lifting.
Basic with Adverts will launch at exactly 4pm GMT on November 3 in the UK, the US, Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico and Spain.
Netflix had originally said it would launch adverts in 2023, but it’s brought the launch date forward, allegedly due to dwindling subscriber numbers.
Industry insiders suspected Netflix wanted to introduce ads before streaming rival Disney+ releases its own ad-supported tier in the US on December 8.
A lot of the details about Netflix’s new tier have been revealed before today’s official announcement – including the restriction on downloads and a reduction on the amount of content available.
Netflix also previously revealed it’s been working with Microsoft, its ‘technology and sales partner’, on implementing the new tier.
Netflix said adverts will be targeted by country and genre, such as action, drama, romance and sci-fi, to ‘help advertisers reach the right audience’.
Advertisers will also be able to prevent their adverts from appearing on content that might be inconsistent with their brand, such as sex, nudity or graphic violence.
Greg Peters, Netflix’s chief operating officer, said today: ‘Basic with Adverts will launch just six months after we first announced the option of a lower priced adverts tier.
‘None of this would have been possible without our team’s hard work or Microsoft’s extraordinary partnership.
DISNEY+ TO INTRODUCE AD TIER
Disney+ will introduce an ad-supported subscription option in addition to its option without ads, beginning in the US on December 8, with plans to expand internationally in 2023.
The ad-supported offering is viewed as a building block in the company’s path to achieving its long-term target of 230-260 million Disney+ subscribers by FY24.
In the US, Disney+ currently costs $7.99 per month, but this will be the price of the new ad-supported tier when it arrives.
Meanwhile, the existing Disney+ tier that doesn’t have ads will increase $3 a month, from $7.99 to a hefty $10.99.
‘We’re confident that with Netflix starting at £4.99 a month, we now have a price and plan for every fan.
‘While it’s still very early days, we’re pleased with the interest from both consumers and the advertising community and couldn’t be more excited about what’s ahead.
‘As we learn from and improve the experience, we expect to launch in more countries over time.’
Since its inception 15 years ago, Netflix has refused to include commercials in any of its offerings, but that has all changed as of this year.
In April, Netflix announced it would abandon its resistance to ads after disclosing it had lost 200,000 subscribers globally during the first three months of the year.
At the time, Netflix CEO Reed Hastings revealed in an earnings call that the platform would introduce ads in the ‘next year or two’.
Then in May, Netflix told its employees that it would introduce ads sooner than expected – by the end of the year, The New York Times revealed.
‘Yes, it’s fast and ambitious and it will require some trade-offs,’ Netflix said in a a note to employees, seen by The New York Times.
‘Every major streaming company excluding Apple has or has announced an ad-supported service. For good reason, people want lower-priced options.’
In July, Netflix announced that it had lost nearly 1 million subscribers in the second quarter of the year – almost five times the amount lost in the first quarter.
Netflix is scheduled to release third quarter earnings next Tuesday (October 18).
Netflix added 8.3 million new subscribers in Q4 2021. But in the two successive quarters it’s lost subscribers, not gained them
Netflix’s streaming rival Disney+ is also introducing an ad-supported subscription tier later in 2022, although similarly the price is not yet known
Netflix’s streaming rival Disney+ is also releasing its own ad-supported subscription tier for US viewers on December 8 and for viewers in other markets next year.
In the US, Disney+ currently costs $7.99 per month, but this will be the price of the new ad-supported tier when it arrives.
Meanwhile, the existing Disney+ tier that doesn’t have ads will increase $3 a month, from $7.99 to a hefty $10.99.
As Disney+ is £7.99 a month in the UK, it’s believed that the UK price will similarly go up by £3 a month when the new ad tier arrives.
Disney+ has a bevvy of hugely-popular and extensive content libraries, including Star Wars, Marvel and Disney films, as well as The Simpsons and some exclusive series, including the eight hour-long Beatles documentary.
NETFLIX BRINGS FORWARD PLANS TO INTRODUCE ADVERTS FOR THE FIRST TIME
In April 2022, Netflix CEO Reed Hastings revealed in an earnings call that the platform would introduce ads in the ‘next year or two’.
Netflix had at the time just revealed that it lost 200,000 subscribers in the first three months of the year, and expected to lose 2 million more in the second quarter.
The share price fell significantly following the news, wiping away roughly $70 billion in the company’s market capitalisation.
Then in May, Netflix told its employees that it would introduce ads sooner than expected – by the end of the year, The New York Times revealed.
‘Yes, it’s fast and ambitious and it will require some trade-offs,’ Netflix said in a a note to employees, seen by The New York Times.
‘Every major streaming company excluding Apple has or has announced an ad-supported service. For good reason, people want lower-priced options.’
Company executives pointed out that HBO and Hulu have been able to ‘maintain strong brands while offering an ad-supported service’.
The news led to a furious backlash from some users, who threatened to cancel their subscriptions if they had to endure ads.
Twitter user @UCantCensorThis posted: ‘Hey @netflix. I’m letting you know now that if I EVER see a single ad interrupt anything I’m watching on your service, I will cancel faster than you can say ‘commercial break’.’
A survey of 2,922 UK consumers by mobile advertising platform LoopMe revealed that more than a third (36 per cent) of UK consumers would cancel their Netflix subscription if it became ad-funded.
However, 34 per cent stated they would continue to subscribe if it meant they could pay a cheaper price with ads.
Paolo Pescatore, analyst at PP Foresight, suggested that in order to attract users to sign up and keep them engaged, the new ad-supported plan would need to be ‘somewhere between 25%-50% less than what they’re paying today’.
Jem Lloyd-Williams, CEO of media agency Mindshare UK, said that, for some, the trade-off between saving some money each month and watching adverts might prove attractive.
‘As long as Netflix continues to invest in high quality content, we think this could be the right move at the right time for the streaming giant,’ he said.
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