Netflix said Thursday it will launch a cheaper, ad-supported streaming option on Nov. 3 that costs $6.99 a month as it scrambles to reverse a recent tide of customer losses.

Currently, Netflix offers ad-free options that range from $9.99 to $19.99 depending on how many users log in to the same account. The most popular service costs $15.49 in the US.

The new plan, dubbed “Basic with Ads,” is slated to launch Nov. 3 with ads that average 4 to 5 minutes per hour, Netflix said, noting that ads will be 15 to 30 seconds in length and will play before and during the programs.

On broadcast networks such as ABC, NBC, or FOX, primetime advertising times range from an average of 12 to 17 minutes per hour, according to Statista.

The streaming giant — home to “Dahmer,” “Stranger Things” and “Emily in Paris” — added that a “limited number of movies and TV shows won’t be available due to licensing restrictions.” The streamer didn’t specify which shows and said it was working on lifting those restrictions.

evan peters as dahmer
Netflix, home to hit show “Dahmer,” is rolling out an ad-supported tier next month.
Netflix

Users who opt for Basic with Ads also won’t have the ability to download shows, however.

The service will be available in 12 countries, including the US, the UK, Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico and Spain.

The decision to offer commercials comes as Netflix looks to jump in the advertising game after it shed over 1 million subscribers earlier this year— a rarity for the world’s largest streaming service, which has more than 220 million global subscribers.

a netflix logo with a remote
Netflix is hoping its cheaper commercial-supported tier will bring it new subscribers.
ZUMAPRESS.com

Since announcing its would look into advertising in April — a 180-degree change for the company that has long sold itself as a commercial-free haven — Netflix has moved quickly to facilitate the launch of the new service, including hiring Microsoft as its partner to help bring its ads to market, as well as two execs from Snap to lead the advertising push.

The Wall Street Journal reported that Netflix was looking to launch its service ahead of chief rival Disney+, which is deploying its ad-supported service on Dec. 8 for $7.99 a month.

a still from stranger things
Shows like “Stranger Things” have helped Netflix retain customers, but now the streamer is facing a decline in customers as rivals like Disney+ and HBO Max have come to market with new shows.
©Netflix/Courtesy Everett Colle

As part of its service, Netflix said it will offer advertisers the ability to prevent their ads from appearing on content that might be controversial, such as sex, nudity or violence. It will also offer broad targeting for advertisers, meaning they will be able to place their ads with relevent shows and movies, and it will provide measurement tools for clients via partnerships with DoubleVerify, Integral Ad Science and Nielsen.



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Tyler Cowan