Netflix to launch ad-based plan in November, not in India for now
The tier will initially be launched in 12 countries-- United States, Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, and the United Kingdom
Streaming giant Netflix will finally roll out its new ad-supported tier in November.
The company has announced that its new Basic with Ads tier plan will be available for USD 6.99 on November 3, 2022, in the United States, Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, and the United Kingdom. The tier will launch in these markets in stages between Nov. 1 and 10, the company said.
Greg Peters, Netflix’s chief operating officer, said existing subscribers would remain in their current plan. If existing subscribers want to transition to the ad-supported plan, they can make the change within their account settings.
The company further said that not all of Netflix’s library will appear on the ad-backed service because of licensing restrictions. Users also won’t be able to download content as they can on other tiers of service. Also, the video quality of ad-backed content will be limited to 720p / HD.
The plan will display four to five minutes of ads an hour and ads will typically be 15 seconds or 30 seconds long, playing before and during content. The company said it has nearly sold out its ad inventory at launch.
According to media reports, during a press conference announcing the new tier, Netflix described it as "pro-consumer".
Talking about the possibility that the new ad-backed plan may reduce its subscriber base as there is a possibility that a lot of users might shift to it, Peters declined to say what portion of Netflix’s existing subscribers the company expects to switch to the ad-backed tier, but he said he expected revenue from ad-tier subscribers to be the same or greater than it is from the comparable ad-free plan.
One of the reports mentioned that Netflix will be giving advertisers the option to target viewers on the basis of country and genres. The subscribers of ad-backed service will have to provide their date of birth and gender, which is more information than it currently asks customers for, and will eventually use that information for ad targeting over time, said Jeremi Gorman, Netflix’s new president of worldwide advertising.
Netflix's ad tier comes quick seven months after the announcement. The streaming giant’s decision to enter the ad business follows back-to-back quarters of subscriber losses in the first and second quarters, and before the announcement of its performance for the September quarter on Oct. 18.
