Netflix announced Thursday plans to roll out a version of the streaming giant’s service with ads on Nov. 3 for $6.99 a month. The Basic with Ads plan will join the service’s three current ad-free plans : A Basic plan for $9.99, Standard for $15.49 and Premium for $19.99.
Netflix said the Basic with Ads plan will feature an average of up to four to five minutes of ads per hour. Ads will be between 15 and 30 seconds in length, and play before and sometimes during shows or films. Netflix will not accept political or policy ads, or those for smoking products or guns. The ad tier will also be offered in 11 countries, including Canada, Australia, South Korea, the United Kingdom, France and Germany.
About 5% to 10% of its movies and TV shows will not appear on the tier, at least initially, due to licensing restrictions, the company said. Subscribers to the plan with ads will not have the option to download shows or movies.
The decision to include ads mark a sharp pivot for Netflix, which had embraced offering a streaming service free of advertising. In a call with investors in April , Netflix co-founder and CEO Reed Hastings said he has been against “the complexity of advertising,” preferring the simplicity of a subscription.
“But as much I’m a fan of that, I’m a bigger fan of consumer choice,” Hastings said. “And allowing consumers who would like to have a lower price and are advertising-tolerant (to) get what they want makes a lot of sense.” More viewers appear accepting of ads on their streaming services if it means saving money. A December survey from Forrester found 44% of U.S. online adults who use a streaming service will put up with ads if it means they pay less.
Netflix hopes ad revenue will offset declines from lower subscription prices and encourage more people to sign up. Its other plans cost $15.49 and $19.99 but offer the ability to watch on more than one screen at a time and to download content.
