What to look forward to: After recent issues forced Netflix to adopt some of its competitors’ policies, the company has announced when it will start offering a cheaper ad-supported tier. The new strategy is designed to compete directly with Disney+ and Hulu, but with some important differences.
Viewers willing to put up with the ads for cheaper Netflix subscriptions can do so. beginning November 3 at 9:00 AM PT (noon EST) for $7 per month. The new base tier will include most, but not all, of the same content as the other plans.
The new Netflix Basic with Ads tier will open in 12 countries: Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, the UK, and the US. Regional pricing outside of the US is available on the Netflix Blog.
The new plan will play about four or five minutes of ads per hour of streaming, each running for 15 or 30 seconds before and during programming. Advertisers will have tools to target ads based on region, genre, and content. In August, a code leak revealed that users might have to answer questions to help advertisers tailor ads.
One of the potential downsides of the new level is limiting video quality to 720p. By comparison, the ad-supported base tier of Hulu costs the same as Netflix but includes 4K HDR streaming. The Paramount Plus ad tier is slightly cheaper at $5 and lets you stream 1080p video. The basic HBO Max tier is similar but costs $10 per month. Depending on what content you’re interested in, Disney+ has the best $8 basic plan for ad-free 4K HDR streaming.
Another downside to Netflix’s ad plan is that it excludes some of its content, but not much of it. Services from companies that own all their content, like Disney+, don’t have this problem, but Netflix has to license most of what it offers, and those agreements change when advertising comes into play.
Netflix COO Greg Peters admitted that the ad level can cut 5 to 10 percent of the catalog, which is not bad, depending on which axes of the program are programmed. The ad-based subscription will no doubt include all original Netflix movies and TV shows like The Sandman, Dahmer, Entergalactic and Derry Girls.
The company’s new strategy is likely an attempt to support subscribers after the difficulties it faced earlier this year. In April, Netflix reported its first-ever loss of subscribers, sending its stock down 75 percent. After all, the company reported losing almost a million subscribers in the second quarter.