Netflix’s cheaper, ad-supported subscription tier couldn’t have come at a better time. Amid creeping inflation, hiring freezes, and fears of a recession, TV viewers are looking for ways to lower costs. The streaming service’s new price offering could be part of the answer.
Starting on Nov. 3, Netflix’s “Basic with Ads” option will allow subscribers to pay $7 to access most of the content available on the Basic Netflix plan, which costs $10 per month. Similar to Netflix’s Basic plan, the version with ads will only offer video up to 720-pixel high-definition. For subscribers concerned with endless ads, Netflix claims it will only air up to five minutes of advertisements per hour during TV shows and movies, each one lasting 15 to 30 seconds.
But a few things will be missing. Viewers won’t be able to download content as they can on the other subscription tiers. Due to what Netflix describes as licensing issues, some TV shows and films will also be unavailable. Although Netflix did not specify which titles would be excluded, a company spokesperson said roughly 85% to 95% of all content available in a subscriber’s country will be included in the Basic with Ads plan.
Belt-tightening viewers not willing to put up with advertisements will be happy to know that the new Netflix plan won’t impact the prices for the existing Basic, Standard, and Premium plans, all of which will remain the same, for now.
In addition to the US, the service will roll out to subscribers in the UK, Canada, Australia, Brazil, France, Germany, Italy, Mexico, Spain, Japan, and Korea.
The full price list for international subscribers hasn’t been released, but in the UK the price will be £4.99 pounds. In Canada, the price will be $5.99 CAD.
By launching its ad-supported subscription at the $7 mark, Netflix is offering a competitive option relative to ad-supported plans from streaming rivals including Disney+ ($8), Hulu ($8), and HBO Max ($10). The low price may also help Netflix reverse its recent subscriber decline. The service lost 970,000 subscribers earlier this year.
Netflix co-CEO Reed Hastings had long pledged to avoid putting ads on the streaming service. But a falling stock price and subscriber losses forced the company to rethink that strategy. Netflix’s stock price is down 66% from its peak in 2021. That lead to the announcement of an ad-supported tier earlier this year.
The big question for next week’s third-quarter earnings report will be centered on subscriber growth. In its second-quarter report (pdf), the company said that it expects to add at least one million new subscribers. The company will report its third-quarter earnings on Oct. 18.