Netflix announced it is launching an ad-supported tier of subscriptions in November for only $7.
The new tier, called “Basic with Ads,” will debut on Nov. 3 for users in 12 countries. The service will offer nearly all of Netflix’s content at a cheaper rate in exchange for a few ads interspersed through viewings. The new tier arrives as Netflix attempts to recover from its economic struggle and declining subscription numbers.
“We believe that, with this launch, we will be able to provide a plan and a price for every Netflix fan,” Netflix COO Greg Peters told reporters at a virtual event on Thursday, according to Hollywood Reporter. “The most important thing for us is that we want to offer consumers choice and for them to figure out what is the best offering for them, and that could mean that some of our existing members shift off [of ad-free plans].”
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Customers can subscribe to one of four tiers: Basic with Ads, Basic for $9.99, Standard for $15.49, and Premium at $19.99. Each tier will affect how many accounts and screens users will be allowed. The company also said that the ad-supported tier would only see four to five minutes of ads per hour, including preroll ads and commercials within the movie. Some films may not be available on the ad-supported tier due to licensing issues.
Netflix nearly sold out all of its advertising inventory, according to Jeremi Gorman, Netflix’s president of worldwide advertising. She said that ads from every major category would appear on the platform but that Netflix would not accept political ads.
The company also said it had partnered with Nielsen to measure Netflix viewership in the United States starting in 2023.
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Netflix CEO Reed Hastings announced that the company was considering an ad-based tier in April, a statement that was followed by a July announcement proclaiming the streaming service’s partnership with Microsoft to provide advertising tools.
Netflix has attempted to recover its profit margins after an abysmal second quarter and declining subscription numbers. The company has tried to maintain some level of profit through internal changes, including the layoff of hundreds of workers in June.
