Netflix Wants to Charge 6.99 a Month for New Ad-supported Tier

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Netflix’s new advertising-supported tier will cost $6.99 per month when it launches in the United States on November 3rd, 2022.

The long-awaited announcement has finally arrived, something that has been anticipated ever since the streaming giant’s subscription count plummeted in the first quarter of 2022 and a reported loss of 970,000 subscribers in the second quarter. As a result, this new ad initiative may be a way for Netflix to recoup its already plummeting viewership.

This may be surprising for some people as the streaming service CEO Reed Hastings went on record multiple times regarding the distaste for ads, stating, “We’ve got a much simpler business model, which is just focused on streaming and customer pleasure.”

However, as of April of this year, Hastings conceded to the idea of “consumer choice” and prompted a cheaper plan in order to keep the company growing. As quoted by Deadline, Hastings states, “One way to increase the price spread is advertising on low-end plans and to have lower prices with advertising,” he said. “Those who have followed Netflix know that I’ve been against the complexity of advertising and a big fan of the simplicity of subscription. But as much as I’m a fan of that, I’m a bigger fan of consumer choice. Allowing consumers who would like to have a lower price and are advertising-tolerant get what they want makes a lot of sense. So, that’s something we’re looking at now, we’re trying to figure out over the next year or two. Think of us as quite open to offering even lower prices with advertising as a consumer choice.”

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But how will these advertisements impact the viewing experience? The “Basic with advertisements” option will include an average of four to five minutes of commercials within an hour and will be at least 15-30 seconds in duration, so you may expect to see a minimum of 16 adverts with each episode of Stranger Things you binge-watch. Whether these ads will play before or during the programme is yet to be confirmed.

Meanwhile, users on the “Basic with ads” tier will be unable to download movies or TV series due to “license limitations,” as well as a change in video resolution, which will now be 720p rather than 1080p, the quality of Netflix’s standard plan, which costs $15.49 per month. The company’s basic package, which does not include advertising, costs $9.99 per month and features 720p resolution.

Netflix Tiers

  • $6.99 − basic with ads
  • $9.99 − basic without ads
  • $15.49 − standard without ads

Starting on Nov. 1, the advertising tier will be accessible in Canada and Mexico, and on Nov. 3, it will be accessible in Australia, Brazil, France, Germany, Italy, Japan, Korea, Mexico, the United Kingdom, and the United States. The launch day for Spain is November 10.

Streaming is apparently now going backwards, with advertisements taking over the platform we used solely because of its simplicity and ease. Whether or not this model actually benefits users remains to be seen, but we remain cautiously optimistic that there is a silver lining for Netflix in the future.

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