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Netflix announced its first ad-supported plan, Basic with Ads, on October 13, 2022: it would cost $6.99 per month in the United States and launch there on November 3. The lower price was meant to give budget-conscious viewers another way to subscribe while opening a new advertising revenue stream. It was a response to a genuine growth setback—but it did not cause Netflix’s subscriber rebound later that year, which was reported before the plan launched.
What Netflix announced—and what the $6.99 price meant
Netflix presented Basic with Ads as an additional, lower-priced option, not a replacement for its ad-free plans. At launch, the U.S. plan cost $6.99 per month, compared with $9.99 for the then-current ad-free Basic plan. Netflix said the ad-supported option would be priced 20%–40% below its existing entry-level price across launch markets. Those are historical 2022 figures, not current U.S. prices. Netflix’s October 2022 announcement and its Q3 2022 shareholder letter set out the plan and pricing rationale.
| Launch-era U.S. feature | Basic with Ads detail |
|---|---|
| Price | $6.99 per month |
| Advertising | Commercials before and during programming; viewers could not skip or fast-forward through them |
| Streams | One simultaneous stream |
| Video quality | HD |
| Catalog | Most, but not all, titles; some were excluded because Netflix lacked the required advertising rights |
| Other plans | Ad-free plans remained available |
| U.S. service launch | November 3, 2022 |
A launch-era report put the expected ad load at about five minutes per hour. Treat that as a contemporary estimate, not a permanent limit or a promise about the current viewing experience. TIME’s report on the launch plan covered the estimate.
Why Netflix was willing to introduce commercials
Netflix had spent years positioning its subscription service around ad-free viewing. The reversal reflected both pressure on subscriber growth and a broader change in streaming economics: a mature service could seek revenue from advertisers as well as monthly fees. A lower-priced tier could appeal to households unwilling or unable to pay for an ad-free plan, while advertising could monetize their viewing.
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The timing mattered. Netflix lost about 200,000 paid memberships in the first quarter of 2022 and roughly 970,000 more in the second—approximately 1.2 million across the first half. That was the business problem behind the “subscription bleed” framing. But Netflix then reported about 2.4 million net additions in the third quarter, before Basic with Ads launched in November. The Q3 increase therefore cannot be credited to the new tier. Contemporary coverage of the launch and subscriber figures explains the sequence.
Inflation and household budget pressure made a cheaper option more relevant, while competition from other streaming services made it harder to rely on subscription growth alone. Netflix described the ad tier as a low-priced offer and pointed to the scale of the advertising market in its launch countries. That was a strategic rationale, not proof that ads would reverse cancellations or solve the company’s growth challenge.
How the financial model could work—and where it could fail
The model has two revenue sources: a smaller subscription payment from someone who might not buy an ad-free plan, plus advertising sold against that person’s viewing. The hoped-for benefit was to attract new households, retain price-sensitive subscribers and generate incremental ad sales.
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The trade-off is that the lower subscription fee can reduce subscription revenue per viewer. For the plan to improve total monetization, advertising revenue must make up enough of that gap without making the experience so frustrating that viewers cancel. The strategy could disappoint if ad demand or fill rates are weak, if licensing limits leave important titles unavailable, or if the cheaper plan mostly shifts existing ad-free subscribers to a lower-paying option. Netflix’s Q3 2022 shareholder letter described advertising as a business that would take time to build.
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Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →Repair Windows errors before they cause bigger problemsFix Now →Scan for outdated or missing drivers - takes under a minuteDriver Scan →Subscriber totals alone would not tell the whole story. Relevant measures include churn, ad-tier uptake, viewing and engagement, revenue per ad-supported member, advertiser demand, and whether members move between ad-supported and ad-free plans. For advertisers, reach, measurement, targeting, brand safety and available inventory matter as much as the existence of a new placement.
How the launch rolled out across 12 markets
The November 2022 dates were country-specific. The following table records Netflix’s original launch schedule, not current plan availability. The schedule appears in the company’s Q3 2022 shareholder letter.
| Market | Original launch date |
|---|---|
| Canada | November 1, 2022 |
| Mexico | November 1, 2022 |
| United States | November 3, 2022 |
| Australia | November 3, 2022 |
| Brazil | November 3, 2022 |
| France | November 3, 2022 |
| Germany | November 3, 2022 |
| Italy | November 3, 2022 |
| Japan | November 3, 2022 |
| South Korea | November 3, 2022 |
| United Kingdom | November 3, 2022 |
| Spain | November 10, 2022 |
Why Microsoft was part of the plan
Netflix selected Microsoft in July 2022 as its advertising technology and sales partner while it built the new offering. Microsoft was not the consumer-facing subscription seller; the partnership was intended to support Netflix’s advertising needs and give advertisers a way to buy inventory. Netflix’s partnership announcement describes the arrangement.
Netflix’s U.S. launch announcement named brands whose ads appeared or were expected to appear, including General Motors, L’Oréal, McDonald’s, LVMH, Subway, Target, Heinz and Carnival Cruises. That was a launch-era roster, not an enduring list of Netflix advertisers. The initial offer also did not promise category exclusivity or official launch partners. Netflix’s U.S. launch notice identifies the brands.
Measurement was another part of the advertising proposition: Netflix said Nielsen Digital Ad Ratings would be used in the United States beginning in 2023. That historical plan should not be taken as a description of Netflix’s present measurement arrangements. Marketing Dive’s launch coverage reported the measurement plan.
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How Netflix compared with other services in 2022
Netflix entered a market where advertising was already part of streaming. Hulu had an established ad-supported service, and Disney+ had announced a U.S. ad-supported tier for December 2022. Netflix’s $6.99 U.S. launch price was below Disney+’s planned $7.99 price. These are historical launch-era comparisons, not current prices.
| Service | Historical ad-tier price | Position at the time |
|---|---|---|
| Netflix Basic with Ads | $6.99/month in the U.S. | Lower-priced access to Netflix’s original and licensed catalog, with ads and some title exclusions |
| Disney+ Basic with Ads | $7.99/month planned for December 2022 in the U.S. | Disney’s family and franchise catalog, including Disney, Pixar, Marvel and Star Wars programming |
| Hulu ad-supported plan | Price not stated in the cited launch comparison; Hulu already had an ad-supported service | More established ad-supported model with an emphasis on current-season television and network programming |
The comparison was about different libraries and business histories as well as price. Netflix’s move was a marked change from its ad-free positioning, while Hulu had long sold an ad-supported option. Marketing Dive’s contemporary comparison covered the market context.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What viewers should know about limitations today
Netflix’s plan names, prices, catalog, device support and ad experience have changed since 2022. Its current help pages describe country-specific availability and policies; the historical $6.99 figure should not be used as a current U.S. price. Check Netflix’s country-specific pricing guidance and the live offer for your location.
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- It can be a gift option
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- Helpful in various ways
- Catalog: Netflix says a small number of licensed titles may be unavailable on ad-supported experiences; a locked-title indicator can identify them. See Netflix’s ads help page.
- Devices: Some older devices cannot run the ad-supported experience because their software cannot be updated. Netflix says viewers can check in the app under Get Help → Plan Compatibility. See device compatibility guidance.
- Travel: An ad-supported experience may not be available in a country where the plan is not offered. Netflix says a traveler may need to return to the plan’s original country or switch to an ad-free plan. See travel guidance.
- Downloads: Netflix’s current support page sets a limit of 15 downloads per device per calendar month on ad-supported plans, resetting on the first day of each month. This is current policy, not a confirmed 2022 launch detail. See download-limit guidance.
- Mobile devices: Current support guidance lists iOS/iPadOS 15 or later and Android 7 or later for supported Apple and Android phones and tablets. See mobile requirements.
- Ad experience and privacy: Netflix says ads appear before and during selected titles and generally cannot be skipped or fast-forwarded; its help page also notes exceptions such as Kids profiles and Netflix games, and commercial breaks at some live events on all plans. Ad selection may use viewing interactions, general location and information supplied by the user; behavioral advertising can also involve interactions with unaffiliated apps or sites unless the user opts out. See Netflix’s current advertising guidance.
What happened after launch
The ad plan’s launch should be separated from Netflix’s recovery in subscribers. The third-quarter 2022 net addition came first; it was evidence that the first-half decline had already eased, not evidence that the new tier had worked. Netflix later described advertising as a potential multibillion-dollar incremental revenue stream while saying in 2023 that ad revenue was not yet material. In 2024, it continued to characterize the advertising business as early-stage while planning broader expansion. These were company assessments of a developing business, not proof that the 2022 plan had already delivered the projected financial gains. See Netflix’s Q2 2023 shareholder letter.
For viewers, the launch created a lower-cost route into Netflix in exchange for advertising and a less complete catalog. For Netflix, it was both a response to affordability and growth pressure and an attempt to add a second way to earn from each hour watched. Whether that trade-off pays off depends on retention, advertising demand and the revenue Netflix earns after accounting for subscribers who choose the cheaper tier instead of an ad-free one.
Quick Recap
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
