Netflix is set to launch its advertising-supported streaming plan on Thursday.
At $7 a month, the new subscription tier costs less than half of Netflix’s most basic plan and will include 4 to 5 minutes of ads per hour, the company said. But the plan comes with some limitations. Viewers won’t be able to download shows for later viewing, Netflix said.
In addition, a “limited number” of movies and TV shows won’t be available at all on the ad-supported tier, the company said, blaming licensing restrictions and noting that it was “working on” the issue. The Wall Street Journal reported Wednesday that Netflix was still in negotiations with Disney, NBCUniversal, Sony Pictures Television, Warner Bros. Discovery and Lionsgate.
Netflix remains the world’s largest streaming service, with 223 million subscribers after a summertime surge in sign-ups that reversed subscriber losses earlier this year. The 15-year-old streaming service has never before included ads, but the Los Gatos, California, company decided to head in a new direction six months ago after a tumultuous start to 2022 that saw viewership shrink.
Netflix shares also have lost nearly half their value this year amid a broader stock market rout that has hit technology companies hard.
The ad-supported option will be available in the the U.S., Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain and the U.K.
Netflix is betting the lower priced ad-based service will prove popular at a time when high inflation is pressuring millions of households to curb their spending. The company, which faces mounting competition from Amazon, Apple and Walt Disney Co., has also started adding video games to its lineup at no added cost.