Six months after Netflix co-CEO Reed Hastings shocked the industry with his first public utterances about an ad-supported tier, the streamer said it will launch its Basic With Ads product in the US on November 3 at $6.99 a month in an initial roll-out that includes the UK and 10 other countries.
Basic With Ads will arrive in Canada and Mexico on November 1, followed by November 3 in the US, UK, Australia, Brazil, France, Germany, Italy, Japan, and South Korea. It will launch in Spain on November 10.
Nielsen will measure US viewership and use its Digital Ad Ratings in the US which will become available sometime in 2023. Netflix has struck up partnerships with DoubleVerify and Integral Ad Science to verify the viewability and traffic validity of its ads starting in the first quarter of 2023.
Monthly subscription costs will vary by country based on market conditions. In the US the product costs less than half of Netflix’s Standard ad-free tier at $15.49 a month (Basic currently costs $9.99 and Premium $19.99) and also launches ahead of Disney’s $7.99 ad-supported tier which arrives on Disney+ on December 8.
Executives said there will be an average of four to five ads per hour and at launch ads will run for 15-30 seconds and play before and during films and series.
Asked by reporters at a press briefing on Thursday (October 13) whether the ads will intrude on films, Netflix COO Greg Peters said new films will only be accompanied by a pre-roll, while titles that have been on the service “for a while” will incorporate pre-roll and mid-roll ads.
Basic With Ads will carry most content that Netflix’s ad-free subscribers enjoy, although a number of films and TV shows will not initially be available due to licensing restrictions. Peters said it will vary by country and estimated that five to 10% of content would not run on the Basic With Ads tier at launch, adding that the situation would evolve.
Advertising will operate on a fixed-price model at launch, although Netflix brass again emphasised that the product will evolve. The streamer said advertisers include major car, travel, retail and luxury brands. Jeremi Gorman, Netflix head of worldwide advertising, said there would be no politcal or policy ads or those supporting guns or any goods or services Netflix deemed to be illegitimate. The executive added that inventory was nearly sold out for launch.
Netflix will offer advertisers the ability to reach target audiences based on country and genre and prevent ads from appearing on content that might be inconsistent with their brand due to sexual or violent content, for example.
The ad-supported tier will not impact existing ad-free Basic, Standard and Premium plans. It will be available on one device and does not offer the download feature available on ad-free tiers.
Asked about privacy and information sharing, executives said Netflix will collect age and gender data from members at sign-up to help target ads to the customer and said the information would not be used to build profiles for targeting on any other service.
Peters declined to say how many new members Netflix expected to get from the new plan although he noted membership information would be shared in earnings reports and the company expected to grow members, revenue and profit.