Netflix adverts plan to launch in November
James R | On 14, Oct 2022
Netflix has confirmed that will introduce its new, ad-supported plan this November.
The streaming giant was previously reluctant to introduce adverts to its service, but after a year in which has lost customers and seen a dip in share price – and also had to adjust to rising costs due to the Covid-19 pandemic and navigate a world in which consumers are facing a cost of living crisis – it has pivoted to a new ad-supported strategy. This will take the form of a lower-priced subscription tier, following in the footsteps of Amazon Freevee and Disney+’s own plans to launch an ad-supported package later this year.
Now, Netflix has announced that Netflix Basic with Adverts will arrive on 3rd November at 4pm UK time.
The plan will cost £4.99 a month in the UK – it will also be available in Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain and the US – and will include most of the features and people expect from Netflix’s Basic plan. That means you can watch Netflix on one supported device at a time, with video quality up to 720p HD.
However, a limited number of films and TV series won’t be available due to licensing restrictions – Netflix says it’s “working on” that – and there will be no ability to download titles.
And, of course, there’ll be an average of 4 to 5 minutes of adverts per hour. The adverts will be 15 or 30 seconds in length and will play before and during TV series and films.
Adverts will be targeted by country and genre (action, drama, romance, sci-fi, etc) and advertisers will also be able to prevent their adverts from appearing on content that might be inconsistent with their brand (filtered, for example, by sex, nudity or graphic violence). Partnerships with DoubleVerify and Integral Ad Science will enable advertisers to verify the viewability and traffic validity of ads from Q1 2023.
Netflix confirms plans to introduce adverts
27th June 2022
Netflix has confirmed that it plans to introduce adverts at a new, lower-priced tier.
The streaming giant has previously been adamant that it would not bring adverts into its service, but a range of factors have caused it to reconsider. In the first three months of this year, the company lost 200,000 subscribers, its first net loss of paid customers, and that sudden dip has sparked a wave of rapid adjustments and rethinks, with projects cancelled and a renewed rhetoric on trying to crack down on password sharing between customers.
There’s a wider problem, though – read our full analysis here – as Netflix attempts to fend off competition from a growing number of rivals, many of which are taking away its previously licensed third party titles. With the streamer therefore investing heavily in its own original content that can remain exclusive, and with costs going up due to a range of factors, it has upped its monthly fees to the point where many are clearly looking to cancel and save their bank balance – especially at a time when the cost of living crisis is hitting household budgets hard.
Now, Netflix is looking for a way to keep people subscribed by doing what it previously ruled out: a new ad-supported subscription tariff, that will carry a lower price tag.
Co-CEO Ted Sarandos announced the news at the Cannes Lions advertising conference: “We’ve left a big customer segment off the table, which is people who say: ‘Hey, Netflix is too expensive for me and I don’t mind advertising,’” he said. “We [are] adding an ad tier; we’re not adding ads to Netflix as you know it today. We’re adding an ad tier for folks who say, ‘Hey, I want a lower price and I’ll watch ads.’”
Netflix has been in talks at Cannes Lions with advertising companies, with the Wall Street Journal reporting that NBCUniversal and Google are frontrunners for likely partners.
The move comes as Disney+ plans to launch its own ad-supported tier in the USA later this year, before rolling it out in 2023.
Netflix dismisses fears that it is introducing adverts
2nd June 2015
No, Netflix is not introducing adverts, the streaming giant assured the public again today, after reports circulating in the media that ads were on the way to the service.
The fear spread following reports from Cord Cutters News that the site was showing trailers ahead of programmes. These followed earlier reports from users watching Netflix through Xbox One consoles that trailers were being shown after shows ended.
The surprise was also experienced by users on other devices, including Roku and Tivo boxes.
While YouTube is known for its pre-roll adverts, though, Netflix does not rely on such content for its income: it is a subscription-based service, which has won over customer loyalty, in part, thanks to its ad-free experience.
Indeed, Netflix has always insisted that it will not run conventional adverts in front of, or after, streams. Banners on menus are also not on the cards.
“Every time [the discussion comes up], we shoot it down,” Steve Swasey, VP of corporate communications told Fast Company as far back as 2011.
The company has struggled to generate a profit, though, as it pumps so much of its income into acquiring and producing new content, as well as expanding into new markets – international growth that is designed to, ultimately, win over new subscribers. (The company enjoyed over $1 billion in revenue in the first three months of 2015, but net income of under $30 million.)
Rather than introduce adverts, the company has already shown it is willing to consider alternative methods to boost revenue, raising subscription fees last year from £5.99 to £6.99 for new customers.
In 2014, CEO Reed Hastings confirmed alongside a financial report that Netflix has “no plans to go towards advertising-based models”.
“Our brand, at least over the next couple of years, and at this point, really stands for that commercial-free experience that we have where the consumer’s in control of the experience. They get to watch when they want. They get to pause it when they want. They can play it when they want, and watch it how and where they want. So it’s fundamental to that control orientation that we don’t cram advertisements down people’s throats. So I really don’t see that.”
Despite this consistent message, though, the appearance of trailers began to spook some this week. Indeed, Sir Martin Sorrell, chief executive of marketing company WPP, recently claimed that Netflix would have to consider adverts eventually to become financially sustainable. Such a move, though, would deter its growing army of global members, which is why it is extremely unlikely to ever occur: if anything, subscription fees would climb another £1.
The videos, meanwhile, are specifically limited to Netflix’s own content: a practice that is already employed by HBO and Sky’s NOW to pitch original programming to viewers.
“We are not planning to test or implement third-party advertising on the Netflix service,” confirmed Netflix in a statement to multiple publications.
“For some time, we’ve teased Netflix originals with short trailers after a member finishes watching a show. Some members in a limited test now are seeing teases before a show begins.”
Nonetheless, there is no guarantee that these trailers will be coming to a streaming service near you soon.
“We test hundreds of potential improvements to the service every year,” the company’s spokesperson added. “Many never extend beyond that.”
Just in case anyone was still confused by the headlines blasted out by the media, Hastings took to Facebook to comment: “No advertising coming onto Netflix. Period.”