Netflix launches ad-supported streaming plan


Netflix Newsroom

Arianne Gonzalez, Arts & Culture Editor

In a move to boost subscriber growth, Netflix Inc. launched its advertisement-supported subscription plan at $6.99 per month on Nov. 3.

The “Basic with Ads” subscription plan will be available in 12 countries, including the United States, Germany, Italy, Korea, Mexico and Brazil.

The plan will offer the same features as the “Basic” plan with some differences, according to the company. It will offer the same 720p high-definition quality as the ad-free plan.

However, it will have an average of four to five minutes of ads per hour, and subscribers will not be able to download content.

Some television shows and movies will also not be available due to “licensing restrictions,” but the company is negotiating with other studios like The Walt Disney Co., Comcast Corp. and Warner Bros. Discovery Inc., according to The Wall Street Journal.

Netflix has partnered with Microsoft Corp. to help with its advertising, and  the streaming service will charge advertisers $65 for every 1,000 viewers. However, some advertisers have been paying between $45 to $55 for ad time.

The ads will run between 15 to 30 seconds in length and will play before and during content.

“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.” Netflix said in a press release. “As we learn from and improve the experience, we expect to launch in more countries over time.”

Netflix has also partnered with DoubleVerify and Integral Ad Science to help verify viewability and traffic validity of ads.

It will also offer “broad targeting capabilities by country and genre.” This allows advertisers to choose which content their ads will appear in, to stay consistent with their brand images.

The “Basic with Ads” launched a month before rival Disney+ planned to unleash its own adsupported subscription plan.

Netflix’s three subscription tiers include “Basic” at $9.99 per month, “Standard” at $15.49 a month and “Premium” at $19.99 a month. The major differences between each tier are the number of devices that are allowed to stream and download at the same time.

The company — which is based in Los Gatos, California — considered an ad-supported plan earlier this year after reporting a major loss of 200,000 subscribers in its first quarter. Stocks dropped 35% and cut $50 billion from the company’s value, leading to subsequent layoffs.

Gregory Peters — who is Netflix’s chief operating officer and chief product officer — said the company wants the new subscription plan’s experience to be “very pro-consumer, consumer centric.”

“What I love about those things is the more we talk to brands and advertisers, there’s actually a high degree of alignment between sort of what their desires are and what we think is great for consumers,” Peters said in a conference call.

Netflix operates the largest streaming service with 223 million subscribers. The company gained 2.41 million subscribers and $7.93 billion in revenue in its third quarter. According to Variety, the company is expected to get 4.5 million new subscribers in its fourth quarter.