Netflix introduces ads in Australia, Japan, and Korea

In a virtual press conference held yesterday, Netflix has revealed details for its upcoming ad-supported subscription tier called Basic with Ads. The offering will be launched in November as opposed to the earlier timeline of early 2023. This is assumed to align with the busy football and holiday season where ad-based media budgets are expected to grow.

The barebones service will be priced at US$6.99 a month and roll out on November 1 in Canada and Mexico and on November 3 across 12 markets including US, UK, France, Germany, Brazil and Japan (¥790), Korea (₩5,500), Australia (AU$6.99) in APAC.

The ads will be served by Netflix's adtech vendor, Microsoft's Xandr.

What the plan entails

The Basic with Ads plan will include an average of four to five minutes of ads every hour and will not allow users to download movies and TV series or titles. Additionally, a few TV series and movies will initially be unavailable due to licensing restrictions, but Netflix says they are working on this.

Commercials will be 15 or 30 seconds in length and will play before and during Netflix’s content. Advertisers will have the ability to prevent ads from appearing on content that might be inconsistent with their brand such as shows that contain elements of sex, nudity or graphic violence.

To help advertisers understand its reach, Netflix has formed partnerships with DoubleVerify, Integral Ad Science and Nielsen to help brands track the success of their campaigns through metrics like viewability and valid traffic.

Campaign earlier reported that Netflix also signed up with British TV ratings agency Broadcasters Audience Research Board (BARB) to measure Netflix’s streaming numbers in the UK—a surprising move for a streaming service that is notoriously close-mouthed about its viewership data.

Nielsen will use its standard digital audience measurement, Digital Ad Ratings, in the US in 2023. This is surprising, because Nielsen has recently come under the scanner for reporting inaccurate streaming data.

Netflix Basic Ads vs competition

Currently, the US$6.99 per month pricing is less expensive than ad-supported Disney+ and Hulu, which will both be US$7.99 per month when Disney’s ad tier launches in December. HBO Max with ads is US$9.99 per month.

Greg Peters, Netflix’s chief operating officer, told the media that the service has been planned in such a way that any customer who switches to the ad-supported subscription from the ad-free basic plan will have a “neutral to positive” effect on the company’s revenue.

“We want to offer consumers choice and figure out what the best offering is for them,” Peters said during the conference call.

Video resolution for Netflix’s advertising tier will be 720p rather than 1080p, the quality of Netflix’s standard plan that costs US$15.49 per month. The company’s basic plan without advertising is $9.99 per month and also has 720p resolution.

Netflix also highlights that intially there will be no advertising within kids programming and new movies. Older films may have mid-roll advertising.