Netflix launched its cheaper “Basic with Ads” plan back in November. But the launch had a significant gotcha for Apple users: The Netflix tvOS app did not support the ads tier, meaning subscribers on that plan simply couldn’t use their Apple TV set-top box to watch Netflix.
At the time, Netflix said support for the ads plan on Apple TV was “coming soon.” Five months on, support for the plan is finally available for Netflix users on Apple TV.
The ads tier launch on Apple TV was confirmed in a statement to TechCrunch.
The Netflix “Basic with Ads” plan costs $6.99 per month, a saving of $3 compared to the ad-free Basic plan. Only a subset of the Netflix content catalog is available to stream on the ads tier though, due to licensing rights issues.
After years of being staunchly against the idea of an ad-supported business model, Netflix caved at the beginning of last year as it experienced slowing growth and quarterly subscriber declines. The ads tier is seen as a way to encourage subscriber count growth during current times of economic uncertainty.
It will also serve as the bedrock for Netflix’s impending crackdown on password sharing. Netflix estimates as many as 100 million people are not paying for Netflix as they are illicitly sharing another person’s account. When the crackdown happens, these users will be directed to the ads plan as an on-ramp to paying for their own account. At least, in theory. It remains to be seen what the conversion rate will be.
Netflix is estimated to have about one million subscribers on the ads tier to date. The company has said it has been pleased with the performance of the ads tier so far and expects it to be meaningfully revenue-positive over time.
All of the other major streaming services have launched cheaper ad-supported tiers in an effort to continue gaining subscribers, as the streaming market matures. The only major outlier is Apple, although there are rumors that an ads tier for Apple TV+ is in the works.
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