Netflix finally reveals £4.99 ad-funded streaming tier: can the data match the hype?

The ‘Basic with Adverts’ plan will keep all the original features but will average four to five minutes of ads per hour, with some shows restricted.

Netflix will begin offering its much-anticipated cheaper subscription for just £4.99 a month, with ads running before and during shows. Described as a "new lower priced ad-supported plan" it will launch in under a month on November 3 at 4pm.

It will still offer most TV series and films, but video quality will be limited up to 720p/HD and an average of four to five minutes of adverts per hour.

Each ad will be 15 or 30 seconds in length and will play before and during series and films.

Some content will not be available in the package, with a limited number of films and TV series restricted due to licensing, however, Netflix have said they're working on it.

“An exciting opportunity for advertisers"

Greg Peters, Chief Operating Officer and Chief Product Officer at Netflix said: “Basic with Adverts… 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 adverts experience.”

The package will be available in 12 counties: Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, the UK and the US.

Brand safety and data transparency

The company is keen to entice advertisers to the new platform with brand safety measures and increased transparency. Earlier this week Netflix partnered BARB to include its viewing figures alongside UK rivals such as the BBC, ITV and Sky.

“To help advertisers reach the right audience and ensure our adverts are more relevant for consumers, we’ll offer broad targeting capabilities by country and genre,” Peters added. “Advertisers will also be able to prevent their adverts from appearing on content that might be inconsistent with their brand.”

Netflix has formed partnerships with DoubleVerify and Integral Ad Science to verify the viewability and traffic validity of the adverts starting in Q1 2023.

IAS verification on Netflix offering provides:

  • Independent, third-party Viewability and Invalid Traffic reporting for Netflix inventory.
  • Trend identification to understand campaign performance and optimise for peak engagement.
  • Consistent verification across media buys to understand performance.

“We are excited to partner with Netflix as they introduce their much-anticipated ad-supported tier that will dramatically increase the global supply of CTV advertising inventory,” said Lisa Utzschneider, CEO, IAS. “IAS provides marketers with the tools necessary to monitor the quality of their media buys as they expand their CTV inventory. We look forward to offering essential coverage to brands and the ability to purchase ads on the Netflix platform with confidence.”

“Brands need evidence to justify that their investment will deliver a return… will the data back that up"

Lee Baring, Managing Partner, Implementational Planning - The Specialist Works, said: It’s a potentially massive development in AV. Netflix has long been lauded as part of the reason for the decline of linear, it’s also a one-stop-international-shop for quality content. What will be interesting is the data that will be shared. For example, the CPM touted is significantly higher than comparable services. What does this added premium deliver?

“Brands need evidence to justify that their investment will deliver a return, and at the moment, Netflix will argue unique cover is their differentiator, but will the data back that up? It’s an incredibly interesting time with loads of questions and very few answers. Will it work? Maybe. But £4.99 is still a price for consumers in the middle of a cost-of-living crisis to pay.'

"The devil is in the detail'

Gregor Chalmers, Head of Broadcast at The Kite Factory, said: "You’d be hard-pressed to find an AV buyer who doesn’t think that Netflix introducing adverts is a good thing in theory, but as always the devil is in the detail. There has been a deluge of news and details this week and with many of them focussing on transparency it’s provided some reassurance to the market. Most positive was Netflix agreeing to sign up to BARB which allow agencies and brands to better define where this new player sits in the ecosystem. Encouragingly for the streaming service the early signs are they take more than double the share of key rivals such as Amazon or Disney.

"Less welcome, for consumers at least, is the news that the cheaper tier will not come with the full suite of content available to more premium subscribers, nor will they be able to download content to watch offline. Given the price point these hopefully won’t prove insurmountable barriers to help address a slump in subscribers. For us in agencies we should be hoping for a smooth and successful launch in November: the opportunity to add Netflix to our plans in 2023 is truly an exciting one."