Netflix will launch its Basic with Ads plan on Thursday. That’s about a month before Disney will offer an ad-supported plan for Disney Plus. Netflix confirmed earlier this year that it’d offer customers a cheaper $6.99 monthly subscription that will play commercials. The hope is that customers will choose the cheaper tier instead of leaving Netflix. Also, advertising revenue might help the streamer’s bottom line.
But a last-minute report details Netflix’s struggles to enter the advertising business. The Wall Street Journal indicates that the company hasn’t inked licensing deals with various content providers for the Basic with Ads plan.
Netflix confirmed months ago that the cheaper tier will lack some of the content available on the traditional subscriptions that show no ads. Now, it looks like there will be a large portion of Netflix’s catalog that won’t be accessible using the ad-supported plan.
Netflix will launch the Basic with Ads plan in a dozen countries as negotiations continue over licensing deals. The Wall Street Journal notes that several major studios are still haggling with Netflix on new agreements.
Netflix hasn’t finalized deals with Walt Disney, Comcast, NBCUniversal, Sony, Warner Bros. Discovery, or Lions Gate, people familiar with the matter said. Of those, Warner Bros. is said to be closer to inking an agreement than the others.
The Journal listed some of the shows available on Netflix that will not be supported on the Basic with Ads plan:
- Disney: Grey’s Anatomy and How to Get Away with Murder
- NBCUniversal: You
- Sony: The Crown, Cobra Kai, and Breaking Bad
These are just a few examples. But Netflix Basic with Ads might lack plenty of fan-favorite shows while the negotiations are ongoing. The Journal points out that Netflix had said previously that about 85% to 90% of its catalog will be available on the ads tier.
The report further details Netflix’s expectations for the new plan. The company will show four to five minutes of ads per hour of content. And it plans to charge advertisers $65 per 1,000 viewers. In practice, some advertisers supposedly drove down the cost to between $45 to $55.
As for the companies that will play commercials on the Netflix Basic with Ads tier, the report lists LVMH Moët Hennessy Louis Vuitton, L’Oreal, and Nyx.
Things could improve in the future. The catalog of content that Basic with Ads subscribers get access to will likely grow. But it may depend on the new plan’s popularity with consumers. Also, there’s no telling when it’ll happen. If you’re following a specific show on Netflix or an Apple TV user, you may want to think twice before downgrading to the Basic with Ads tier.
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