Netflix with ads is here. After adamantly opposing adding commercials to its service for years, the streaming giant had a change of heart in April. Faced with stiff competition and large-scale subscriber loss, it announced that it was working on an advertisement-supported service with lower price points to attract more users.
On Thursday, Netflix chief operating officer Greg Peters unveiled the first stage of the ad-supported service, set to be available from next month in 12 countries.
"The timing is great because we really are at this pivotal moment in the entertainment industry and evolution of that industry," Peters said.
Here's everything you need to know about Netflix Basic with Ads.
What are the price plans for Netflix Basic with Ads?
The new ad-supported Netflix service will be priced at $6.99 in the US, $3 lower than its lowest-priced tier without commercials. In the UK, it will cost £4.99 a month and in Canada, it will be $5.99.
When will Netflix Basic with Ads launch?
The new Netflix packages will initially be available in 12 countries: US, UK, Canada, Australia, Brazil, France, Germany, Italy, Japan, Korea, Mexico and Spain.
The service will be rolled out in stages. In Canada, it will be available from November 1, while in the US and UK, it will launch on November 3. Spain will follow on November 10.
More countries will be added at a later date, Netflix said.
How will ads work on Netflix?
There will be four to five minutes of ads per hour with the new plan, with commercials playing before and during shows and films. While newly released films will have limited advertising to preserve the cinematic experience, some movies and shows will not be initially available within the plan due to licensing restrictions.
"We are looking at a very light ad load and including some very tight frequency caps so that members don't see the same ad repeatedly," Peters said while unveiling details of Basic with Ads.
What's the difference between Basic with Ads and other existing plans?
Netflix said existing customers would not be affected and that all existing ad-free plans — Basic, Standard and Premium plans — will continue to be available.
Video quality for Basic with Ads will be 720p. Netflix said it was also bumping up the quality in its ad-free Basic plan to 720p, which was earlier limited to 480p.
Most shows and movies will be available as part of Basic with Ads with only few titles — about 5 to 10 per cent — missing at launch due to the licensing restrictions. And like existing plans, users will be able to stream Netflix on a variety of TV and mobile devices and have the option to change or cancel their plans at any time.
Other streaming services including Walt Disney Co's Hulu and Disney+ and Warner Bros Discovery's HBO Max already have, or plan to offer, ad-supported options that cost less. Those services charge between $8 and $10 per month for plans with commercials.
Netflix, known for hits such as Stranger Things and Squid Game, reported 220.7 million paying subscribers as of June, down nearly 1.2 million from the start of the year.
— Additional reporting by Reuters