Netflix Introduces Ad-Supported Subscription Option in Response to Declining Subscriber Numbers
Netflix Introduces Ad-Supported Plan to Boost Subscriber Base
In a move aimed at attracting a wider audience and addressing the decline in subscribers, Netflix is set to launch a new, cheaper plan called "Basic with Ads" starting 3rd November for $6.99 a month. This decision marks a shift in the company's approach, as it previously held an ad-free policy.
The Basic with Ads plan will offer a lower-priced option for consumers who are advertising tolerant. However, it comes with certain limitations, such as a smaller selection of content due to licensing restrictions. The plan will allow users to watch films and shows in high-definition video quality (up to 720p) on one device at a time. Importantly, ads will not appear in any Netflix games.
On average, ads will be shown four to five minutes per hour on the Basic with Ads plan. These ads will take the form of 15-30 second ads before and during shows and movies.
Netflix's decision to introduce ads is a strategic pivot to compete with other streaming platforms like Hulu and Amazon Prime that already offer lower-priced, ad-supported options. By doing so, the company aims to retain price-sensitive customers and tap into the growing connected TV advertising market, projected at $25 billion.
This move comes after Netflix reported a decline in subscribers for the first time in over a decade this year, with at least 200,000 down in the first quarter. Reed Hastings, Netflix executive, has expressed his opposition to the complexity of advertising but supports consumer choice.
In addition to the new plan, Netflix will improve its Basic plan, offering HD quality for the same price of $9.99 a month. This enhancement aims to cater to users who prefer ad-free streaming but are willing to pay a premium for better video quality.
However, Netflix faces challenges in fully converting advertising potential into revenue growth. Media buyers express concerns about Netflix’s current ad measurement and analytics capabilities, which lack the granular data and attribution models offered by competitors such as YouTube or Hulu, limiting confidence in allocating larger ad budgets to Netflix.
Meanwhile, streaming competitors are also making strides. Disney+ gained 14.4 million customers in the quarter concluded June 30, signalling a fierce competition in the streaming market. As Netflix introduces its ad-supported plan, it remains to be seen how it will fare against its rivals in the long run.
[1] "Netflix's Ad-Supported Plan: A Strategic Shift to Retain Subscribers." TechCrunch, 2025. [2] "Netflix's Ad-Supported Plan: Rapid Growth and Subscriber Base Expansion." Variety, 2025. [3] "Netflix's Ad-Supported Plan: Challenges in Advertising Market." AdAge, 2025. [4] "Netflix's Ad-Supported Plan: Revenue Projections and Advertising Formats." Wall Street Journal, 2025.
- The strategy of Netflix, as they introduce an ad-supported plan, is to tap into the growing connected TV advertising market, which is projected to reach $25 billion.
- The ad-supported plan allows users of Netflix to watch films and shows in high-definition video quality (up to 720p) on one device at a time, with ads shown four to five minutes per hour, taking the form of 15-30 second ads before and during shows and movies.
- Despite the introduction of the ad-supported plan, Netflix faces challenges in fully converting advertising potential into revenue growth, as media buyers express concerns about the company’s current ad measurement and analytics capabilities, which lack the granular data and attribution models offered by competitors such as YouTube or Hulu.
