Finally, the streaming giant unveils its much anticipated ad-supported subscription plan ‘Basic with Ads’.What was once believed unthinkable is a reality today. Ultimately, Netflix needs more revenue and ads are one of the resources to achieve it.
Netflix announced on the press call that it is introducing a lower-priced ad-supported plan for $6.99. The new subscription plan ‘Basic with Ads’ is $3 less than the current cheapest Netflix plan without ads.
And the surprising part is that Nielsen will be Netflix’s audience measurement partner, which is criticized for reporting inaccurate streaming data.
Markets: To start with, it will be rolled out in 12 countries- Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, the UK, and the US minus India.
Launch date: On November 1, Canada and Mexico subscribers are the first to try the new plan. It will then roll out to the U.S., the U.K., France, Germany, Italy, Australia, Japan, Korea, and Brazil on November 3. Spain will be the last to experience the cheaper tier when it launches on November 10.
Pricing: Basic with Ads will cost just $6.99 a month in the US. It will not increase the price of the existing plans. The streaming giant will beat rival Disney+ by one month, which is hiking the price of its ad-free plan along with the launch of an ad-supported plan on December 8.
Let us analyze and compare the pricing with the competitors
Video quality only up to 720p/HD (now for both Basic with Ads and Basic plans); an average of 4 to 5 minutes of ads per hour; a limited number of movies and TV shows won’t be available due to licensing restrictions, which they are working on, and no ability to download titles.
Apparently, the percentage of unavailable titles differs depending on the country, Tech Crunch reports. As of launch, approximately 5% to 10% of the Netflix catalog will not be available in the ad-supported plan. Netflix will work to reduce that number as time goes on.
Offline Viewing: Furthermore, offline viewing would not be possible, which is characteristic of many AVOD services (ad-supported video-on-demand).
Contrary to early 2023 opinions, Netflix announced the Basic with Ads plan six months after unveiling its lower-cost ads plan. The company wrote, None of this would have been possible without our team’s hard work or Microsoft’s extraordinary partnership. The switch from linear is happening at an ever-increasing speed, with streaming now surpassing broadcast and cable in the US.
“We’re confident that with Netflix starting at $6.99 a month, we now have a price and plan for every fan. 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. As we learn from and improve the experience, we expect to launch in more countries over time.”
Netflix’s announcement of an ad-supported subscription plan marks a milestone in its 25-year history. Ad companies will also benefit from Basic with Ads, the company said,
“the chance to reach a diverse audience, including younger viewers who increasingly don’t watch linear TV, in a premium environment with a seamless, high-resolution ads experience.”
Ad Format: Each ad will be 15 or 30 seconds in length, which will play before and during shows and films. New Netflix movies will have pre-roll ads without interruptions. Older movies, however, will receive preroll and midroll ads.
Advertiser Controls: Netflix will offer broad targeting capabilities by country and genre (e.g. action, drama, romance, sci-fi) to help advertisers reach the right audience and ensure ads are more relevant for consumers Advertisers will also be able to prevent their ads from appearing on content that might be inconsistent with their brand.
Verification Tools: Netflix has partnered with DoubleVerify and Integral Ad Science to verify the viewability and traffic validity of the ads starting in Q1 2023. These companies will ensure ads run where they’re supposed to and that they conform to industry standards. DoubleVerify will provide viewability and IVT verifications that will be valuable for advertisers’ marketing goals.
Audience Measurement: To enable advertisers to understand how Netflix can reach their target audience, Nielsen will use its Digital Ad Ratings (DAR) in the U.S. This will become available sometime in 2023 and eventually be reported through Nielsen ONE Ads.
In addition, Netflix is measuring its UK streaming numbers with the British TV rating agency Broadcasters Audience Research Board. An unrevealing move for a streaming service famous for its close-mouthedness about viewership figures.
Omida research suggests that 60% of Global Netflix Subs to Use Ad-Supported Option by 2027. New subscribers would be acquired and existing subscribers would be transitioned to the ad tier as part of this change.
The announcement of the news comes ahead of Netflix’s Q3 earnings announcement, which will be released next Tuesday, October 18. Whether Netflix of the future will be different from Netflix of the past will be determined by the next few years.
