The presence of advertisements apparently won’t be the only major difference between Netflix’s ad-supported and ad-free plans. Text reportedly found in the code of Netflix’s iPhone app suggests the ad-supported plan won’t let users download movies and shows for offline viewing.
The text says, “Downloads available on all plans except Netflix with ads,” according to a Bloomberg report yesterday. The text was discovered by iOS developer Steve Moser, who wrote about it on his blog. Unsurprisingly, the Netflix app “code also suggests that users won’t be able to skip ads—a common move in the streaming world—and playback controls won’t be available during ad breaks,” Bloomberg wrote.
Netflix has been offering video downloads in its apps since late 2016. A Netflix spokesperson told Ars, “We are still in the early days of deciding how to launch a lower-priced, ad-supported tier and no decisions have been made. So this is all just speculation at this point.”
Moser’s blog post said he also found Netflix app text from a setup process for new subscribers who select the ad-supported plan. The text refers to the use of personalized ads. “Now, let’s set up your ad experience. We just need a few details to make sure you get the most relevant ads on Netflix. It’ll be really quick, we promise!” the text says.
Ad tier planned for early 2023
After years of resisting ads, Netflix Co-CEO Reed Hastings announced in April that the streaming service will offer an ad-supported tier. Netflix says it plans to launch the ad-supported tier in early 2023.
Netflix prices in the US range from $9.99 for “Basic” to $19.99 a month for “Premium.” Netflix says the “lower priced ad-supported subscription plan” will be offered “in addition to our existing ads-free basic, standard, and premium plans.”
Netflix hasn’t said what the ad-supported plan will cost or whether it will have other limits like the ones in Netflix’s cheapest current plan. The Basic plan, which is currently the cheapest option, does not provide high-definition video and has two other notable limits: Basic users can’t watch on more than one screen at a time, and they can only download videos on one phone or tablet.
The $15.49-per-month Standard plan allows HD video and lets subscribers watch on two screens simultaneously and download videos on two devices. The $19.99 Premium plan allows 4K viewing, the ability to watch on four screens simultaneously, and downloads on up to four devices.
Netflix losing subscribers
Netflix is also cracking down on account-sharing by testing an “extra member” fee in some countries and an “extra home” fee in others. A Netflix letter to shareholders said the company aims to complete a broader rollout of sharing fees next year.
Netflix last month reported a loss of 970,000 paid streaming subscribers in Q2 earnings after having lost 200,000 customers in the first quarter of 2022. Worldwide paid memberships decreased from 221.64 million to 220.67 million in Q2, and revenue growth has slowed dramatically.
Netflix says the ad-supported tier is key to improving revenue and profits. “While it will take some time to grow our member base for the ad tier and the associated ad revenues, over the long run, we think advertising can enable substantial incremental membership (through lower prices) and profit growth (through ad revenues),” Netflix’s quarterly letter to shareholders said.
Netflix hired Microsoft to provide advertising technology, saying that “Microsoft offered the flexibility to innovate over time on both the technology and sales side, as well as strong privacy protections for our members.”