The streaming service has a new option to catch shows and movies with advertising, at the cheapest membership price yet.
The era of Netflix with advertising is here. Thursday marked the launch of Netflix's cheaper, ad-supported tier in the US and eight other countries, after it rolled out in Canada and Mexico on Tuesday.
The world's biggest subscription video service, Netflix grew into a behemoth partly thanks to its strategy of making shows and movies available in ad-free binges. Back when traditional, commercial-packed TV was the main way people watched, Netflix pitched itself as the alternative that wouldn't interrupt the flow of your programming with advertising, nor would it make you wait week to week to watch your next episode. Building itself into a giant by going against the grain of the TV industry, Netflix spent years dismissing the notion of advertising on its service.
Fast forward to today: Netflix is the one behind the times. Nearly all of Hollywood's major media companies have launched their own streaming services to take on Netflix, including Apple TV Plus, Disney Plus, HBO Max, Peacock and Paramount Plus. And as they rolled out, they introduced features that have now become the norm customers expect, including an option to pay less if you watch ads.
Nearly every one of Netflix's new competitors offers a cheaper tier with advertising. (The lone holdout besides Netflix, Apple TV Plus, is reportedly considering ads, too.) Now Netflix, grappling earlier this year with its first membership declines in a decade, has reversed course to add advertising as well.
Here are the biggest things to know.
Starting this week, Netflix began running ads alongside its streaming shows and movies for the first time, but only in select countries and only if you subscribe to a new tier called Basic with Ads. If you want to keep watching Netflix without advertising, the service still has the same ad-free memberships.
If you're already a Netflix subscriber who has never seen ads, you still won't. But if you want to pay less for Netflix every month in exchange for sitting through ad breaks during your streaming, you can sign up for a new Basic with Ads account.
The new Basic with Ads membership option has been launching this month across 12 countries. It started with rollouts in Canada and Mexico on Tuesday. Thursday, the new tier went live in the US, Australia, Brazil, France, Germany, Italy, Japan, South Korea and the UK. Next, it will widen to Spain on Tuesday, starting at 9 a.m. PT.
Not long after the company first indicated publicly it was open to an ad-supported tier in April, it said in July that it was "targeting to launch ... around the early part of 2023." But then reports said Netflix moved up the launch date to better compete with Disney Plus' own ad-tier launch in December.
In the US, Basic with Ads is $7 a month, a savings of $3 monthly compared with the cheapest ad-free membership. That's cheapest Netflix has every offered a stand-alone streaming subscription in the US.
By comparison, in the US:
A full, country-by-country price rundown for Basic with Ads is at the end of this article.
No, Netflix isn't increasing the prices of its existing plans.
It's a reasonable question: Disney Plus is going to hike prices for its existing ad-free membership when it launches an ad-free tier Dec. 8.
In the past, Netflx has bumped its prices higher roughly every two years, but lately it has sped up the pace: Its last price hike in the US was announced in January, which was barely more than one year after the previous one. This quicker cadence may feel like a warning of more hikes to come, but every time Netflix raises prices, it also has to deal with what's known as churn, or the rate of cancellations. Generally, Netflix has characterized its churn after a price increase as manageable, calling it an "adjustment period" of "slightly higher churn." But with Netflix so spooked by its existing membership declines so far -- including some cancellations this year that were prompted by the latest price increase -- the company is unlikely to tempt fate by raising prices again so soon.
Last month, Netflix confirmed its existing tiers will stay the same price.
Until now, Netflix had three tiers of subscriptions at different prices, all of them ad-free: Basic, Standard and Premium. In select countries, including the US, Netflix now has four tiers:
The Standard and Premium plans are unchanged.
The ad-free Basic tier has one change: With the launch of Basic with Ads, the ad-free Basic tier is getting bumped up to a higher video image quality -- both Basic and Basic with Ads are getting 720p HD quality video, after HD was previously reserved for Standard subscriptions.
Once the new tier is live in the country where you live, you can either sign up for it as a new member or switch your existing subscription to the cheaper tier.
If you're a new Netflix member, you can sign up for the Basic with Ads plan as you would for any other Netflix plan as soon as the new tier goes live in your country.
If you are already a Netflix subscriber, you can switch your plan to Basic with Ads by logging into your Netflix account. By clicking on "Plan Details," you can select "Change Plan." If you don't see the option for Basic with Ads, it's possible that you have Netflix through a third-party billing partner or with a package -- you'll need to contact that provider to confirm whether the ad-supported plan is available.
If you still can't find Basic with Ads, you may be using an incompatible device -- a few devices won't stream Netflix if you have a Basic with Ads account. Apple TV, for example, doesn't support streaming on the new, cheaper tier. Neither does Playstation 3, although PS4 and PS5 do. Netflix has a support page with some guidance by device.
Netflix said it will average no more than four to five minutes of advertising each hour. Ad breaks will happen both before your program starts (known as preroll) and in the middle of your programming at a scene change (known as midroll). Netflix is aiming to have "some very tight frequency caps so that members don't see the same ad repeatedly," Chief Operating Officer Greg Peters said.
By comparison, when HBO Max launched its ad-supported tier last year, it said its ad load would be less than four minutes per hour. Disney Plus has said that it's aiming to average four minutes of advertising per hour for its coming ad-supported tier, too. And Peacock, when it was preparing for its launch, said its ad-supported tiers would have five minutes of ads per hour.
Traditional TV networks' ad load can reach up to 15 minutes an hour.
No. You can pause during an ad break, but you can't skip or fast-forward through advertising on Netflix.
No. The ad-supported tier doesn't necessarily paywall any parts of the catalog, but a "limited" number of titles won't be available to watch because of licensing restrictions, Netflix said. The amount of titles locked out from ads-supported members is roughly 5% to 10% of the library, varying by country, according to the company.
No. Basic with Ads membership cannot download to watch offline at all.
If they watch on a Kids profile, they won't -- Kids profiles won't run any advertising.
The monthly price for Basic with Ads varies depending on where you live:
To verify the pricing of all tiers in your country, Netflix's plans and pricing page has a drop-down menu at the top that lets you choose which country's prices to display.