Netflix says Basic with Ads will cost $6.99/month in the US and debut on November 3 in 12 countries, offering most titles, at up to 720p, and without downloads

Starting in November, Netflix will finally roll out its new ad-supported tier for just a few bucks a month …

The Verge 2022-10-14 Charles Pulliam-Moore

Context & Ripple Effects

Netflix’s reported $7–$9 ad-tier plan has become a defined launch, with a lower-priced entry point that exchanges some viewing features for advertising. Disney had already set out its own $7.99 ad-supported Disney+ tier, making price and tier design an immediate streaming-market comparison.

The launch also foreshadows Netflix’s later removal of the ad-free Basic option for new and returning members in the US and UK, a portfolio shift toward ads or higher-priced ad-free plans.

First-order effects

US subscribers gain a $6.99 Netflix option, while accepting ads, 720p playback, no downloads, and a catalog that excludes some titles.
Netflix creates a lower-priced subscription path across 12 countries while reserving features associated with its higher tiers.

Second-order effects

Disney’s $7.99 ad-supported offer faces a directly comparable Netflix entry tier, increasing pressure to distinguish its ad load, catalog, and ad-free upgrade value.
Netflix’s tier boundaries make the ad-supported plan a migration route from its cheapest ad-free offering, a direction later reinforced by plans to retire ad-free Basic in markets with ads plans.

Third-order effects

If streaming services continue pairing lower entry prices with feature restrictions, subscription pricing will increasingly steer viewers between advertiser-funded access and premium ad-free access rather than offer a single low-cost ad-free plan.

The trend: Major streaming services are using ad-supported tiers as both a lower-price acquisition channel and a way to reshape the value of ad-free subscriptions.

Discussion

About Netflix Greg Peters on x
Netflix Starting From $6.99 a Month
Vox Peter Kafka on x
Welcome to Netflix — with ads
Gameranx A.K Rahming on x
Netflix will launch its basic, $6.99 tier in November
@netflix @netflix on x
Enjoy your Netflix experience exactly as it is today? Great! Nothing about the way you watch Netflix is going to change. From November, Netflix will be available from $6.99 a month. Basic with Ads, Netflix's new lower priced ad-supported plan. https://about.netflix.com/...
@bzamayo Benjamin Mayo on x
Alongside the ads tier announcement, Netflix today upgraded the Basic ($9.99/mo) plan video quality from 480p to 720p. This is as momentous as if Apple increased the 5GB free iCloud storage.
@eric_seufert Eric Seufert on x
2/ In order to yield $3 in ad revenue per user per month to achieve ARPU neutrality, Netflix must generate 45 ad views per user per month, or 1.5 per day. Are current users — those comfortable with the $9.99+ price point — likely to make that tradeoff? https://twitter.com/...
@rory_johnston Rory Johnston on x
Next Netflix is going to announce a dedicated wire that comes from outside the house and plugs directly into your TV, giving you a direct feed without the worry of bandwidth limitations. Call it Cabl. https://twitter.com/...
@teneikaask_you @teneikaask_you on x
Ads will appear whenever a show or movie is started and be in between playtime. Very similar to Hulu. Ads are tailored based on the genre of the show or movie as well. https://about.netflix.com/...
@sherman4949 Alex Sherman on x
Big Netflix news: Ad tier will be $6.99 in the US, launching Nov. 3. That's lower than Disney+ and Hulu, whose ad tiers will be $7.99 per month. All the details here: https://www.cnbc.com/...
@eric_seufert Eric Seufert on x
How could the ARPU accounting on the switch from ad-free to ad-supported *possibly* be “neutral to positive”? https://twitter.com/...
@stevekovach Steve Kovach on x
I asked Netflix execs if they'll be sharing show ratings directly with advertisers and got a “something something something nielsen something something more to share later” non answer before they muted my line on the conference call. https://www.cnbc.com/...
@sherman4949 Alex Sherman on x
Other details: *Ad tier will launch in 12 countries to begin with *ARPU is “neutral to positive” for every customer who switches from ad-free basic to ad-supported basic *Commercials will be 15 to 30 seconds *Netflix content will be Nielsen rated https://twitter.com/...
@terronk Lee Edwards on x
Kinda bullish on Netflix ads since they'll be mostly displayed on a platform (TV) that Apple doesn't control and therefore can't hoodwink everyone into letting them capture all the ad revenue from competitors excused by a disingenuous argument about privacy. https://twitter.com/.…
@patrickcoffee Patrick Coffee on x
“Netflix is offering advertisers the ability to target ads broadly based on country and genres like romance, science fiction and action, and letting brands opt out of advertising alongside sexual or graphically violent content, the company said.” https://twitter.com/...
@nicsperling Nicole Sperling on x
Netflix to Offer Cheaper Ad Option Beginning Nov. 3. Charging $6.99—a $1 less than Disney's plan. https://www.nytimes.com/...
@jimwaterson Jim Waterson on x
Netflix with ads will be available at £4.99 a month from next month. (I wonder how many people who won't pay at the moment will be tempted to sign up by this lower priced inferior product rather than just... break the T&Cs and find a login to share.) https://www.theguardian.com/ …
@artemr Artem Russakovskii on x
Netflix with Ads will only come as a variant of the Basic plan. Which means no downloads and 720p max. $6.99/mo. 4-5 minutes of advertising per hour on average. Why not bring ads to all tiers, including 4K @netflix? https://about.netflix.com/...
@onejarednewman Jared Newman on x
Disney using ad tier as cover for price hikes. Netflix using it to bring prices down (for now). https://twitter.com/...
@tomwarren Tom Warren on x
can't wait to pay $6.99 for Netflix streaming at 720p with ads that are probably 4K 😵‍💫 https://twitter.com/...
@pettycommajared Jared Petty on x
TV: Free with ads, beamed through space. Netflix: Pay your ISP then pay us then watch commercials and also there's a show in there somewhere. https://twitter.com/...
@lilfilm Sean Baker on x
$7 to watch television. Sorry but any streamer with ads should be free. https://twitter.com/...
@onejarednewman Jared Newman on x
- A savings of $3/mo over ad-free. - 720p, single stream only, apparently no option to upgrade with ads. - Basic ad-free getting bumped to 720p at no charge. 🤔 https://about.netflix.com/...
@tomwarren Tom Warren on x
Netflix's new ad tier is launching next month for $6.99 per month. It will be available in 12 markets, including the US, UK, France, and Germany on November 3rd with up to 720p streams. Details here: https://www.theverge.com/... https://twitter.com/...
@venkatananth Venkat Ananth on x
long, but worth reading this @Lucas_Shaw piece on netflix's coming challenges in a highly competitive streaming market. https://www.bloomberg.com/...
@carlquintanilla Carl Quintanilla on x
“.. By the end of 2021, the numbers couldn't be ignored .. In March, Neumann, the CFO, let loose a trial balloon at an investor conference. Netflix wasn't religious about advertising, he said, adding, ‘Never say never.’” (via @Lucas_Shaw) $NFLX https://www.bloomberg.com/...
@lucas_shaw Lucas Shaw on x
I will have more to share this weekend. But FWIW, the general sentiment among current and former employees is: Netflix will be fine. It's just not sexy/special anymore. https://www.bloomberg.com/...
@lucas_shaw Lucas Shaw on x
Netflix faces its biggest challenge in a decade. I spent the last few months talking to employees, partners and rivals about how it got here and what comes next. For @BW https://www.bloomberg.com/...
@lucas_shaw Lucas Shaw on x
Netflix's stock is on pace for its first down year since 2014. Over the last few months, the company has surrendered all of its gains from the last 5 years. https://www.bloomberg.com/... https://twitter.com/...
@digitalshields Mike Shields on x
Brutal line in this great @Lucas_Shaw post on the future of Netflix: “now everyone in the ad industry agrees the customer experience on Hulu is terrible” https://www.bloomberg.com/...
@sarthakgh Sar Haribhakti on x
“The service now accounts for about 8% of all TV viewership in the US, the most of any network, and has more customers abroad than Disney+, HBO Max, Paramount+, and Peacock combined.” Great profile by @Lucas_Shaw https://t.co/FsBcAEgf5o

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