New York, USA (CNN)– What was once thought unimaginable is now a reality: Netflix with ads is here.
The streaming giant unveiled “Basic with Ads,” its much-anticipated, ad-supported subscription plan, on Thursday. The new tier will cost $6.99 per month in the US and will be available on November 3 in the US, Canada, Australia, Brazil, France, Italy, Germany, Japan, Korea, Mexico, Spain and the UK.
The company said that “existing plans and members will not be affected” and that Basic with Ads “complements our ad-free Basic and Premium plans.”
The new option will show more of what’s available with Netflix’s current $9.99/month basic plan, but will, on average, include four to five minutes of commercials per hour.
These ads will be 15 or 30 seconds long and will be shown before and during TV series and movies.
Netflix indicated that it will offer broad targeting capabilities by country and genre to help “advertisers reach the right audience – and make sure our ads are more relevant to consumers.”
Netflix said advertisers will also be able to prevent their ads from appearing on content that may not be compatible with their brand (such as sex, nudity or graphic violence).
The company added that it is working with rating tracker Nielsen in the US in 2023 “to enable advertisers to understand how Netflix is reaching their target audience.”
Netflix said that while it’s still very early days, “we’re thrilled with the interest from both consumers and the ad community – and we couldn’t be more excited about what’s coming”. “As we learn from and improve on the experience, we expect to roll it out in more countries over time,” she added.
The debut of an ad-supported subscription plan is a pivotal moment in Netflix’s 25-year history.
CEO Reed Hastings said in April that the company was open to adding commercials to the service, sending shock waves through the media and industries where Hastings had for years been adamant not to place ads on the platform.
“We are… an ad-free company. This remains a profound part of our brand proposition,” Netflix said in a letter to shareholders in 2019. But after the nightmare of 2022, the platform can no longer stick to this approach.
In April, Netflix revealed that it had lost a number of its subscribers for the first time in more than a decade. After this news, stocks plummeted, the company lost billions in market value, hundreds of employees were laid off and doubts spread about the platform’s future, raising questions about the viability of the entire broadcast market.
In July, Netflix announced that it would partner with Microsoft to boost sales and technology for this new subscription plan.
Ultimately, Netflix needs more revenue and ads are one way to achieve that. This does not mean that all subscribers will have to watch commercials since the current plans will remain ad-free, but there will now be a choice between a cheaper ad-supported plan and a premium plan.