Netflix Is Upgrading Its Ad-Supported Plan to the Next Level

In addition to announcing more specific plans for its password-sharing crackdown, Netflix is bolstering its ad-supported plan with new features that it hopes will attract more customers.

Netflix first announced its ad-supported tier last June, promising a more affordable plan for folks who were willing to put up with a few ads in exchange for paying a lower monthly fee. At the time, Netflix co-CEO Ted Sarandos clarified that ads would not be coming to any of its paid tiers — even the basic $9.99/month plan would continue to be ad-free.

Although that will remain the case, subscribers to Netflix’s ad-supported plan will soon get more than what the cheapest ad-free plan offers — and still pay less money.

In its Q1 2023 Letter to Shareholders, Netflix announced that its ads plan has been doing so well that it’s decided to upgrade it to begin offering 1080p resolution and two concurrent streams in all twelve markets where the plan is currently available.

Now ‘Standard with ads’

Netflix is already rolling out the new features in Canada and Spain, where the plan has been renamed to “Standard with ads” to align it with Netflix’s mid-tier Standard plan, which offers the same “Full HD” resolution and two simultaneous streams without ads. The Basic plan remains limited to 720p (“HD”) resolution and a single stream.

In explaining the rationale for the change, Netflix notes that its ad-supported plan has been doing so well that it’s already generating more revenue than the ad-free standard plan, so upgrading it to the same feature set presumably makes sense.

“We are pleased with the current performance and trajectory of our per-member advertising economics. In the US for instance, our ads plan already has a total ARM (subscription + ads) greater than our standard plan. So this month we’ll upgrade the feature set of our ads plan to include 1080p versus 720p video quality and two concurrent streams in all 12 ads markets – starting with Canada and Spain today. We believe these enhancements will make our offering even more attractive to a broader set of consumers and further strengthen engagement for existing and new subscribers to the ads plan.”

In Canada, the new Standard with ads plan keeps the same price of $5.99 CAD, versus $9.99 CAD for the Basic Netflix plan and $16.49 CAD for the full Standard plan. Since this change, Netflix has also begun de-emphasizing the Basic plan, hiding it behind a “See All Plans” button when selecting a new plan.

Netflix will likely follow the same pricing model when the changes come to the U.S. market, where Basic with ads is currently priced at $6.99/month, compared to $15.49/month for the full Standard package.

In other words, you’ll soon be able to enjoy the same Full HD quality and dual streams as the Standard Netflix plan for less than half the price — as long as you’re willing to live with a few ads.

However, despite these two improvements, Netflix’s ad-supported plan still has a few other significant limitations to be aware of:

1. You can’t download movies or TV shows for offline viewing.
2. You’ll typically see about 4–5 minutes of interstitial ads per hour — advertisements that come up in the middle of whatever program you’re watching. Each ad will be 15 or 30 seconds long.
3. Certain titles, such as new-release movies, will show only pre-roll ads to “preserve the cinematic experience.”
4. You can’t skip ads or fast-forward through them.
5. You won’t get Netflix’s entire catalog on the ad-supported plan. About 5–10% of what’s on Netflix is still unavailable on the Standard with ads plan “due to licensing restrictions.” Netflix is working on improving this.
6. You must provide your date of birth to sign up for an ad-supported plan “for ads personalization and other purposes.”
   

Due to the need to show ads in a controlled way, the Standard with ads plan isn’t available on as many devices as the other ad-free Netflix plans. It only recently came to the Apple TV, where you’ll need to be running at least tvOS 16.1 to subscribe; iPhone and iPad users require iOS 15 or later.

The new Standard with ads is available in Canada and Spain today. Netflix says the changes will soon roll out to the rest of the countries where the Basic with ads tier is currently available, but it has yet to offer any specific timeline for when that will happen.