Netflix with Ads: The Time Has Come

For years, there have been expectations that Netflix would eventually go with an ad-supported option. I remember listening to my favorite media podcast (shout out to eMarketer) after the first earnings call when Netflix reported flat growth. The declaration was made then that Netflix was going to make the call sooner or later, and as a marketer, I’m very glad that time has come.

On November 3, 2022, Netflix’s new Basic Service with Ads will launch in twelve markets – including the U.S. In a somewhat surprising move, Netflix named Microsoft as its exclusive technology partner for this new ad-supported offering.

Here is a recap of what we have learned thus far about Netflix’s new ad supported tier:

• Cost: $6.99/month (which prices it slightly below Disney+, which is $7.99/month)
• What happens to current plans: No changes. Current plans and members will not be impacted, and the new “Basic with Ads” plan will complement the other existing subscription plans
• What ad formats will be accepted: :15 and :30
• How many ad minutes will be available: 4-5 minutes/hour
• Targeting: the company has stated that targeting will be broad at launch – by country/genre
• Content: advertisers will be able to ensure their ads do not appear in content that is inconsistent with brand guidelines
• Ratings: Netflix announced a partnership with Nielsen that will launch in 2023
• Can I download my content in this tier? That functionality will not be available within this tier

 

Given the Microsoft partnership, sales of this inventory will be run through Xandr. We are in active discussions with Xandr, and will continue to update our clients on this opportunity.

This article is featured in Media Impact Report No. 39. View the full report here.