Netflix's Ad-Supported Tier May Already Be In Trouble

By Spencer Perry

Just launched at the start of November, Netflix's cheaper, ad-supported tier for their streaming service hasn't seen many sign ups according to a new report. The Wall Street Journal brings word of this, sourcing analytics firm Antenna, who claim that only 9% of Netflix's signups in the month of November saw subscribers select the tier with advertising. They further note that in that small percentage 57% of subscribers that selected the ad-based tier were users signing up for the first time or re-activating their accounts; 43% of the subscribers to the tier were users downgrading their subscription from a more expensive one.

Netflix apparently disputed the figures from Antenna's metrics, writing in a statement to TWSJ: ""It's still very early days for our ad-supported tier and we're pleased with its launch and engagement, as well as the eagerness of advertisers to partner with Netflix." The ad-supported tier on Netflix, known as "Basic with ads," was rolled out on November 3rd and costs $6.99 a month. In comparison to other subscription tiers at Netflix, the Basic version is $9.99 a month, with limits of 720p streamign and only one device at a time; Standard with runs at $15.49 a month with 1080p streaming and 2 devices at once; and Premium which runs $19.99 a month with 4K streaming and 4 devices at once.

According to TWSJ, HBO Max's roll-out of a tier with ads was at least a hair more successful than Netflix, with 15% of their new subscribers in June of 2021 selecting the ad-based tier. Back in November, the same time that only 9% of Netflix's new subscribers picked the ad-tier, over 20% of HBO Max subscribers were already on the same tier, with nearly 90% of Peacock subscribers doing the same. All of that is to say that Netflix's tier with ads is something that will continue to grow, and is in fact something they're betting on being bigger in the future rather than right out of the gate.

There are usually four to five minutes of ads per hour on the Basics With Ads plan, including on both TV shows and movies. As previously confirmed by Netflix though, new releases, like saying the upcoming Glass Onion: A Knives Out Mystery, "will just have a pre-roll" that runs before the movie begins, Netflix's chief operating officer and product chief Greg Peters previously said in an interview. "We'll try to preserve that sort of cinematic model there," he added. Movies that have been on Netflix for a longer period of time are going the "traditional" route of pre-roll and mid-roll ads, with "less frequent" breaks.

(Cover photo by Rafael Henrique/SOPA Images/LightRocket via Getty Images)

Trending Now: