The long-awaited Netflix ad-supported plan will commence soon.
After losing members in the first half of the year, Netflix Inc. announced on Thursday that it will launch a streaming package with advertising for about $7 per month in November.
The “Basic with Ads” plan’s $6.99 pricing is $3 cheaper than Netflix’s most affordable tier without advertisements. Over the course of ten days, the new option will be introduced in 12 countries, including the US, Brazil, Germany, Japan, and Korea.
Four to five minutes of advertising will be shown to plan subscribers every hour, according to Netflix. To preserve the cinematic experience, new releases will have little advertising.
According to Netflix Chief Operating Officer Greg Peters, 5% to 10% of Netflix’s content will not be accessible on the ad-supported alternative due to licensing limitations.
In afternoon trading, Netflix stock was up 3.9% at $229.44. This year, the company’s stock price has dropped 62%.
For years, Netflix officials have vehemently rejected including advertisements in their service. When the business shocked Wall Street by losing customers in the first quarter and projecting further defections, they declared a change of heart in April.
“We at Netflix have a huge opportunity ahead to grow our unit and to attract more subscribers. And part of that is having a wide range of pricing plans,” Peters said on Thursday.
Other streaming services, such as HBO Max from Warner Bros. Discovery and Hulu and Disney+ from Walt Disney Co. (DIS.N), both provide ad-supported versions for less money. For choices with advertisements, such providers charge between $8 and $10 per month.
As of June, Netflix, which is well-known for successes like “Stranger Things” and “Squid Game,” had 220.7 million paying subscribers, a decrease of over 1.2 million from the start of the year. The business anticipated gaining 1 million new customers in the third quarter.
When Netflix releases its earnings report on Tuesday, the most recent data will be made public.
On Nov. 1, the Netflix ad-supported plan will launch in Canada and Mexico, and on Nov. 3, it will do the same in the United States, Brazil, the United Kingdom, France, Italy, Germany, Australia, Korea, and Japan.
Spain will follow on Nov. 10—one week later.
According to Jeremi Gorman, president of global advertising at Netflix, the new tier’s ad inventory was completely sold out due to interest from luxury brands, automakers, and consumer package goods companies.
Advertisers may target viewers by country or genre, or broadcast adverts on the top 10 shows on the service.
According to Gorman, Brands also can exclude ads from content featuring graphic violence, sex or nudity. Additionally, Netflix is implementing third-party verification to ensure traffic and ad impressions.
Beginning the next year, Nielsen, a ratings company, will also provide audience measurement.