(KTLA) — Netflix is offering its cheapest plan yet, but there is a catch. For the first time ever, subscribers will see ads in their shows and movies.
The “Basic with Ads” plan costs just $6.99 a month, $3 less than the next cheapest plan and $13 less than the company’s top-of-the-line plan.
“[Streaming] companies realize that in order to keep people coming through the door, they’re going to have to figure out more economical way to make people subscribe — people can’t afford every service in the world,” said Brian Steinberg, a Variety editor that covers the TV advertising business.
Should you switch to the new plan? There are some pros and cons.
It’s available to new and existing customers, and you can downgrade by going into your account and selecting “change plan.”
Keep in mind, if you sign up or switch to the new plan, you will have to tell Netflix your date of birth and gender.
Also, if you’re using an Apple TV to watch Netflix or a super old Chromecast device, it may not work with the new plan right now.
The Basic with Ads plan currently has about four minutes of ads per hour. Some are at the beginning of shows, others are randomly inserted.
You can’t skip ads, but you can pause them. When I signed up for the new plan, the ads I saw were for big-name brands including Hilton, Best Western and Tiffany.
“These guys are not shy about that they need more money and more cash flow, so I suspect over time, you might see four to five minutes increase to six, seven, eight, nine, 10,” said Steinberg.
Ads are personalized based on what you watch on Netflix, plus your age, gender and location.
The low-priced plan streams in the lowest HD resolution — 720p — and you can’t download shows to watch offline, say, on a flight.
Also, the ad-supported plan doesn’t include all shows and movies. Items you can’t watch are marked with a lock. This could get annoying fast if it’s a show or movie you want to watch. There’s no way to see this selection before you sign up.
Scrolling through, I noticed many more movies with the lock. It seems like a lot of third-party content not made by Netflix itself is locked out.
The cheap plan also limits you to streaming on one device at a time. This could be tricky if you share your account with a household member and you both want to watch something on different devices in different rooms at the same time.
Netflix with ads is part of a bigger trend towards lower-cost and free streaming options. HBO, HULU, Peacock and Paramount+ all offer cheaper plans that include ads.
Amazon FreeVee, Tuvi and Pluto TV all offer completely free streaming services that are ad supported.
“People fled TV to get away from advertising… well now it’s back, and I think it’s going to stay,” concluded Steinberg.
Separately, Netflix also unveiled a new tool called Managing Access and Devices, which lets you see all the devices your Netflix account is signed into and when they last streamed something.
It also lets you remove access to that device remotely, which Netflix says is handy if you forgot to log out at a hotel or a friend’s house.