Netflix is beating Disney+ to the punch in launching an ad-supported
tier.
Today, in a preview, Netflix -- which had previously indicated that the launch would take place in early 2023 -- announced that its Basic With Ads tier, priced at $6.99 per month, will
debut on Nov. 1 in Canada and Mexico, and on Nov. 3 in the U.S. and eight other countries (Australia, Brazil, France, Germany, Italy, Japan, Korea and the UK). The tier will launch in
Spain on Nov. 10.
Disney+'s ad-supported tier, set to launch on Dec. 8, will be priced a dollar higher, at $7.99. A bundle of Disney+ with ads and Hulu is priced at
$9.99.
"Hundreds" of advertisers have already signed for the Netflix ad-supported tier, and its inventory is nearly sold out, according to Jeremi Gorman, Netflix's president of worldwide
advertising.
Nielsen has been selected to handle the new tier's audience measurement.
Netflix confirmed that 15- and 30-second ads will be shown before or during most TV shows and
movies. Like Disney+'s with-ads tier, Netflix will limit the ad load to an average of four to five minutes per hour.
New Netflix movies on the service will get pre-roll ads instead of
in-content interruptions, but older movies may have both pre-roll and mid-roll ads.
Basic With Ads subscribers, like subscribers to Netflix's no-ads plans, will have access to its games
without ads.
"The sweet spot for streamers looking to move to an ad-supported model is one that offers 5 minutes or less of advertising per hour and reduces the cost of their subscription by
half," observes Ashwin Navin, co-founder and CEO of Samba TV. "This new tier threads that needle nicely.”
Unlike Disney+, which raised the price of its ad-free Disney
from $7.99 to $10.99 per month in anticipation of its with-ads tier, Netflix will not change the prices of its no-ads plans. Netflix's basic no-ads plan costs $9.99 per month, its standard plan
$15.49 per month, and its premium plan $19.99 per month. The no-ads basic plan allows watching on one device at a time, the standard one on two devices, and the premium one on four devices.
Like the Netflix basic no-ads plan, the ad-supported tier will allow access on only one device at a time, and have video resolution of 720p HD, versus 1080p HD video with the standard
and premium plans. (4K viewing is available only with the premium plan.)
Netflix said that a "small amount" of its content -- about 5% to 10%, varying by country -- will not be
available in the with-ads tier initially due to licensing restrictions, and downloads are not included. In addition, the plan may not be available through all third-party billing partners and
packages.
"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 Chief Operating Officer Greg Peters stated in announcing the ad-supported tier's launch details. "As we learn from and improve the experience, we expect to launch in
more countries over time.”