Netflix will begin running advertisements on a lower-cost plan next month

Netflix ads will be available starting next month as part of a gradual rollout of a new ad-supported membership tier called Basic with Ads in the United States and 11 other countries, the company announced Thursday. In the United States, the new tier will be $7 a month, $3 less than the cheapest ad-free Netflix option and $1 less than the ad-supported tier that rival Disney Plus will offer on December 8.

The new Basic with Ads memberships will be available first in Canada and Mexico on November 1, followed by the United States, Australia, Brazil, France, Germany, Italy, Japan, South Korea, and the United Kingdom on November 3. Finally, on November 10, it will be available in Spain. Basic with Ads will be available at 9 a.m. PT on each launch day, regardless of the country’s time zone.

Netflix is not raising the prices of its existing plans. One of the few adjustments to its current offerings is that the least ad-free plan, the $10-per-month Basic, now includes 720p HD content. Previously, HD-quality streaming were only available to Standard users for $15.50 per month. Standard now gets 1,080p HD resolution, while the $20-per-month Premium tier gets 4K and HDR.

The new tier will not allow subscribers to download content to view later. While the ad-supported tier does not necessarily paywall any parts of the collection, Netflix stated that a “limited” number of titles will not be available to view due to existing licensing limitations. During a press call, Chief Operating Officer Greg Peters told reporters that 5% to 10% of the library will be unavailable to ad-supported members, depending on the country.

The new Basic with Ads package will include four to five minutes of advertising every hour, which will appear both before your movie or show begins and during a scene break. It will also feature “some very tight frequency caps so that members don’t see the same ad repeatedly,” according to Peters.

Netflix has long been opposed to advertising on its platform. However, after losing members for the first time in a decade earlier this year, the corporation reversed course to embrace advertising. Netflix hopes that a lower-cost tier, which can charge you a bit less each month by profiting off the advertising you see, would help it regain subscribers.

Netflix is changing its tune because to increased competition. A so-called streaming battle has spawned a slew of other services to compete with Netflix in the last three years, including Apple TV Plus, Disney Plus, HBO Max, Peacock, and Paramount Plus. Almost all of Hollywood’s major media corporations have put billions of dollars into their own streaming operations, all in pursuit of Netflix’s seemingly unstoppable membership growth. This influx of streaming options has complicated how many services you must utilize (and, in many cases, pay for) to watch your favorite shows and movies online.

Almost every new Netflix competitor has a reduced or free tier with commercials. (Apple TV Plus, the lone holdout aside from Netflix, is allegedly exploring advertising as well.)

Netflix isn’t the only company doing a 180-degree flip. It intends to implement new costs for password sharing beginning next year, with some already being tried in Latin America.