Netflix is now selling a lower-cost version of its streaming service with ads in the U.S. and other countries — but for now, it doesn’t work with Apple TV or Apple TV 4K devices.
A Netflix rep confirmed to PvNew that “Basic with ads plan support on tvOS is not available at launch but coming soon.” The spokesperson didn’t explain why it’s not available on Apple TV currently. A message on Netflix’s customer-support site about the lack of support of the ad-supported tier on Apple TV was first spotted by 9to5Mac.
The fact that Netflix Basic With Ads, which costs $6.99 per month in the U.S., isn’t on Apple TV out of the gate reflects the streamer’s accelerated timeline for the launch. This summer, Netflix said it was targeting early 2023 for the ad-tier launch, but moved that up to early November, telling ad buyers it wanted to come out before the Dec. 8 debut of Disney+’s ad tier.
After years of company execs dismissing plans for a foray into advertising, the company announced a change of heart earlier this year — after Netflix encountered its first subscriber declines in more than a decade. The aim with the ad-supported version is to reach a broader addressable market of more price-sensitive consumers.
Netflix Basic With Ads launched in the U.S. on Nov. 3. The cheaper plan will be available in 12 countries: Australia, Brazil, Canada, France, Germany, Italy, Japan, Mexico, South Korea, Spain, the U.K. and the U.S. It first rolled out in Canada and Mexico on Nov. 1, followed by the other countries with the exception of Spain, where it will debut Nov. 10.
In the U.S., Netflix Basic With Ads is $3 cheaper than the Basic plan ($9.99/month), which provides the ability to stream on one device at a time. Previously, the Basic plan has not supported HD, but with the launch of the ad tier, Netflix will provide video quality of up to 720p HD for both Basic With Ads and the plan with no ads. (The Netflix Standard plan, $15.49/month in the U.S., provides 1080p HD and two simultaneous streams; the Premium plan, at $19.99/month, includes 4K HDR titles and up to four streams.)
The ad-supported plan does not include Netflix’s full content catalog, which the company previously had disclosed. A “limited number of movies and TV shows won’t be available due to licensing restrictions, and we’re going to be working on reducing that over time,” Netflix chief operating officer Greg Peters told reporters at a briefing last month. Depending on country, about 5% to 10% of titles will be unavailable on Netflix Basic With Ads, Peters said. In addition, customers on the ad plan will not have the ability to download titles for offline viewing.
The new ad tier “represents an exciting opportunity for advertisers — the chance to reach a diverse audience, including younger viewers who increasingly don’t watch linear TV, in a premium environment with a seamless, high-resolution ads experience,” Peters said.
Netflix’s Peters said the company expects total revenue from the ad-supported tier to be “neutral to positive” compared with the no-ads Basic plan. “From our perspective, we’re not trying to steer people to one plan or the other,” he said. In announcing its Q3 earnings, Netflix said, “While we’re very optimistic about our new advertising business, we don’t expect a material contribution in Q4’22 as we’re launching our Basic With Ads plan intra-quarter and anticipate growing our membership in that plan gradually over time.”
At launch, ads will be either 15 or 30 seconds long (and 20 seconds in Spain), which will play before and during TV shows and films. The Netflix tier with ads will serve an average of 4 to 5 minutes of ads per hour, roughly in line with the ad loads of Peacock and Disney+ with ads. New-release movies will include only pre-roll ads to “preserve the cinematic experience,” Peters told reporters.
As of mid-October, Netflix had nearly sold out its inventory for the initial launch globally with “hundreds” of different advertisers in categories including automotive and consumer packaged goods, according to president of worldwide advertising Jeremi Gordon. Netflix will not accept certain categories of ads, including political and issues ads or advertising for illegal products or tobacco, Gorman said. In addition, advertisers will be able to opt for their ads to not appear on adult-oriented content “that might be inconsistent with their brand,” according to Peters. For example, buyers will be able to specify that their ads not appear within programming that contains sex, nudity or graphic violence.
Initially, Netflix’s ad-supported service will not have any third-party attribution. According to Peters, the company has partnerships with DoubleVerify and Integral Ad Science (IAS) to verify the viewability and traffic validity of ads starting in Q1 2023. Nielsen’s Digital Ad Ratings (DAR) service in the U.S. will start measuring Netflix Basic With Ads “sometime in 2023,” Peters said, and eventually ad viewing will be reported through Nielsen ONE Ads.
