Netflix Leak Has Good News About Ad-Supported Streaming Plan

Although they are pretty much a mainstay in the physical world, ads in digital content and on websites have earned a negative reputation. Unlike TV commercials and newspaper ads, the advertisements you see in apps and on sites have the habit of following you around and taking a peek at your activities via tracking. That said, it's hard to deny how those ads can be beneficial, at least when used properly and conscientiously — they can, for example, enable companies to offer free services, which is how many like Google, YouTube, Facebook, and the rest operate. 

Subscription-based companies like Netflix are also starting to use that strategy to make their products more attractive, but it seems that those on the company's upcoming ad-supported tier won't have to worry about being bombarded with disruptive commercials all the time. After a series of rumors, Netflix confirmed earlier this summer that it is indeed developing a more affordable subscription tier for its video streaming service that will be partly subsidized with ads. This plan won't be completely free, of course, but it could still be cheaper than the platform's base price of $9.99 per month. The company's still in the early process of establishing this plan, though, and it's still trying to strike deals with all of the content publishers involved.

Because of some licensing arrangements, Netflix won't be able to offer its whole catalog on the ad-supported tier. Some content licenses prohibit showing any ads at any time, for example, so those shows and movies will be inaccessible to subscribers on the subsidized tier. It seems, however, that Netflix is also making its own exceptions that could help paint this subscription plan in a slightly more positive light.

According to insiders who spoke with Bloomberg, there will be certain types of content that won't have ads, either permanently or temporarily, despite the upcoming cheaper plan using advertisements to cut the price. At the top of this alleged list is original content for kids, which will be completely ad-free, the sources claim. This is likely Netflix's way of avoiding the legal headaches that could come with accidentally showing inappropriate ads on kids' programming, something that Google and YouTube know all too well from experience and costly lawsuits.

Netflix original movies won't show commercials either, at least according to the insiders, but only when they're first released. The report doesn't say how long this ad-free treatment will last, but those films will reportedly eventually show ads, as well. This strategy is reportedly to placate some filmmakers and studios when debuting their movies on Netflix on both paid and ad-supported tiers — after all, can you imagine your cinematic viewing experience being interrupted by ads on a film's red carpet debut? Movies from other studios, however, will allegedly still have to be negotiated independently, which could cost Netflix no small amount.

All of these, however, are still part of that early planning stage that Netflix likes to warn people about. In this industry, it's not as easy as simply flipping a switch to make that ad-supported tier happen. Netflix will have to tread carefully and negotiate with partners, particularly when it comes to increasing its premium for the license to show ads with content. If Netflix fails to get enough content to fill up a substantial library to make the ad-supported tier attractive, it might end up scrapping the plan altogether.