Netflix is undeniably one of the biggest streaming services in the world, if not the biggest. But everything reaches a peak at some point, which is what Netflix did in its first quarter, reporting a loss in profits for the first time in over a decade. What is Netflix’s solution to curb this drop in subscribers? An ad-supported subscription tier.
Is Netflix adding ads?
So what’s the deal with ads on Netflix?
Up until now, the streaming service has made a market off of binge-able content with no commercial breaks or platform ads.
That’s about to change as the streaming giant announced in April it would be introducing a cheaper subscription tier that includes ads.
The company is committed to this idea having recently revealed it has selected Microsoft as its global advertising technology and sales partner.
“It’s very early days and we have much to work through. But our long term goal is clear. More choice for consumers and a premium, better-than-linear TV brand experience for advertisers. We’re excited to work with Microsoft as we bring this new service to life,” Netflix COO Greg Peters said in a statement.
Netflix then revealed in October that its new subscription plan is named ‘Basic with Ads’.
What is different about the new tier?
The Basic with Ads tier will still offer a wide variety of tv shows and movies with the ability to cancel the plan at any time. However, Netflix said the content on offer will be limited with certain movies and TV shows unavailable due to licensing issues.
Video quality will also be restricted to HD and users won’t be able to download titles for offline viewing.
When is Netflix’s new ad-supported tier launching?
Netflix has moved fast on its new ad-supported tier and announced it will be rolling out to specific markets from November 4, 2022.
The Basic with Ads tier will be available in 12 countries initially including Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, the UK and the US.
The new tier will cost $6.99 a month in Australia. Netflix’s cheapest tier in Australia is currently $10.99 and ranges up to $22.99 a month for the top plan. This makes the new plan cheaper by $5 a month.
How will ads on Netflix work?
To be clear, ads will not be implemented into your Netflix subscription at your current tier level.
Instead, what is happening is Netflix has created a new and cheaper subscription tier to appeal to those who want to pay a lesser price point.
In its announcement, Netflix said that ads will be between 15-30 seconds in length and play before and during both shows and movies. There will be an average of 4-5 minutes of ads per hour.
The streamer also said it would offer ad targeting capabilities by country and genre to help relevant ads reach the right audience.
The good news is that if you have no desire to change your current Netflix subscription, these ads will not impact you in any way.
The streaming giant is also cracking down on password sharing in response to its loss in profits, so make sure to warn all the leeches on your account.
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