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Netflix launches a cheaper ad-supported platform next year for $6.99

Netflix announced Thursday that its new ad-supported offering will launch in the U.S. on Nov. 3 at 6.99.

The company’s Basic With Ads plan, which is less expensive than its $9.99 Basic plan, will allow for an average of four to five minutes per hour of ads. The Basic plan will have video quality up to 720p/HD.

Downloading titles will not be possible for users, and some titles may not be available due to country licensing restrictions. The company stated that advertisers will be able to block advertisements from appearing on content that is inconsistent with their brands like violence or sex.

The company released the following statement: “In short, Basic with ads is everything people love Netflix, at lower prices, with a few advertisements in-between.”

Netflix is still the world’s largest streaming service with 221 million global subscribers. Netflix shares have lost 62% this year, amid concerns about the company’s ability to grow its user base. The company lost subscribers in the first quarter of the year.

Netflix is in fierce competition with other streaming platforms like Disney+ which launched its ad tier in December at $7.99 per month and HBO Max, which costs $9.99 per month.

Netflix laid off 300 employees in June to cut costs and stem stagnant growth. Netflix stated that growing revenue was “a big challenge” in its July earnings announcement. After the market closes on Tuesday, Netflix will announce third-quarter earnings.

In Thursday trading, shares rose as high as 4%

Netflix plans to launch a family-friendly paid offering next year, which will coincide with a crackdown against password sharing. Netflix estimates that 100,000,000 households use shared passwords worldwide, with 30 million in North America. According to Netflix, unauthorized sharing makes the growth of membership and revenue more difficult.

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