Netflix‘s cheaper, ad-supported tier is coming, launching in the US on Nov. 3 (but not before some other countries get it).
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 commercial-packed traditional TV dominated, Netflix pitched itself as the alternative that wouldn’t break 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, dealing with its first membership declines in a decade, has reversed course to add advertising as well.
Here are the main things to know.
Does Netflix have ads?
Not yet, but it will starting in November. When it introduces ads, they will appear only on a new subscription 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 will Netflix launch advertising?
The new Basic with Ads membership option will go live in November in 12 countries:
- Nov. 1: Canada and Mexico
- Nov. 3: The US, as well as in 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).
Not long after the company first indicated publicly it was open to an ad-supported tier in April, it said as of early July that 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?
In the US, Basic with Ads will be $7 a month, saving $3 monthly compared with the cheapest ad-free Netflix membership.
By comparison:
- 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 when 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 — that the company is unlikely to tempt fate by raising prices again so soon.
On Thursday, Netflix confirmed its existing tiers will stay the same price.
What are all the plans and their prices?
In the US, Netflix currently has three tiers of subscriptions at different prices: Basic for $10 a month, Standard for $15.50 and Premium for $20. Starting Nov. 3 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, 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 4K and HDR video quality.
Are the current plans changing in any way with the launch of ads?
The Standard and Premium plans are entirely 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). The company will have “some very tight frequency caps so that members don’t see the same ad repeatedly,” according to Netflix Chief Operating Officer Greg Peters.
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.
Will Basic with Ads get the complete Netflix library to stream?
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 existing licensing restrictions, Netflix said. The amount of titles locked out because of licensing terms is roughly 5% to 10% of the library, varying by country.
Can I download to watch offline with Basic with Ads?
No. All of Netflix’s ad-free subscriptions allow downloads, but anyone with a Basic with Ads membership cannot download to watch offline.
What’s the pricing for Basic with Ads outside the US?
The monthly price for Basic with Ads varies by country:
- 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.
