Netflix's ad-supported tier launches at $6.99, but there are tradeoffs

Enlarge / A photo of Stranger Things, one of Netflix's biggest shows. netflix

Today, Netflix launched "Basic with Ads", its previously announced ad-supported subscription tier, in the United States and several other countries. At $6.99 per month, it's the cheapest Netflix subscription option, but it comes with some notable tradeoffs.

Countries with Basic with Ads today include the US, UK, France, Germany, Italy, Australia, Japan, Korea, and Brazil; it was first launched two days ago in Canada and Mexico.

Basic with Ads subscribers will see up to five minutes of ads per hour, including ads that run before episodes and some that run mid-episode. The industry calls these ads "pre-roll" and "midroll", respectively. Netflix says some movies will only have pre-roll ads.

Ads won't be the only limitations of this cheaper subscription tier, however. Basic with Ads will only stream to one device at a time and will not support downloading videos for viewing on the plane or at other times when you do not have internet access.

Subscribers won't be able to stream at any resolution higher than 720p, which is low enough for just about everyone today in the era of affordable 50-inch or larger TVs. Additionally, specific license agreement details mean that up to 10% of Netflix's library will not be available at this level.

Many competing streaming services have already introduced low-cost ad-supported options, including HBO Max, Peacock, and Paramount+, among others.

Mega-hit Disney+ plans to follow in a few weeks with its own ad-supported tier, which will cost $1 more than the one Netflix just introduced. Disney+ will also raise the prices of its other tiers, but Netflix isn't currently doing that, despite having done so many times in the past.

Netflix has long resisted launching an ad-supported tier, but the company has continued to face an uphill financial battle as it spends heavily on content but faces obstacles such as competition considerably increased newly launched streaming services and user behaviors like password. sharing.