Netflix‘s ad-supported tier has a confirmed price and a set launch date. The $6.99 subscription option will be available to Netflix users in 12 countries starting on November 3.
The new tier has been rumored for months, but Netflix officially announced it during a call with press on October 13. “We’re confident that with Netflix starting at $6.99 a month, we now have a price and plan for every fan,” said Netflix COO Greg Peters during the announcement. “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.”
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At its lowest price point, Netflix will be targeting cost-conscious consumers who don’t want to pony up for the cheapest ad-free version of Netflix (which costs $9.99 per month). The streamer began experimenting with ads in response to disappointing revenue and subscriber numbers from the first quarter of 2022. Among other concerning trends, more than 20% of people who subscribe to Netflix in the US cancel after one month, according to Bloomberg.
Netflix worked quickly to realize its dream of a reduced-price subscription. Microsoft came on as the company’s official ad partner in July, and two execs arrived from Snap to head up Netflix’s in-house ad unit. The streaming titan appeared to accelerate the launch of its new tier in hopes of beating an analogous Disney+ product to market. Netflix’s take on ad-supported streaming will be cheaper than similar options for Disney+ and HBO Max.
The ad-free experience has always been a big selling point for Netflix, which has traditionally marketed itself as a less disruptive alternative to cable. In order to ensure it maintains some advantages over traditional TV, Netflix is planning a relatively light ad load, with about five minutes of spots per hour. Despite previous concerns, Netflix claims to have sold most of its newfound inventory.
There will be a few perks missing from the discount version of Netflix. Users who buy that subscription will not be able to download content for offline viewing (presumably because those downloads would not be able to run ads). Some shows and movies may not be available with ads due to licensing issues, but the streamer is “working on” those cases.
After announcing the new tier, Netflix saw its stock price go up by more than 5%. The ad-supported version of Netflix will first be available in Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, the UK, and the US, with more countries to be included at a later date.