Why Does Netflix Have Ads Now? (Explained)

Written by: Brooke Gaines
May 3, 2025

Netflix, once the ad-free streaming haven we all loved, has undergone a significant transformation in recent years. The platform that built its reputation on interruption-free binge-watching now offers tiered subscriptions with both ad-supported and ad-free options. This shift represents one of the biggest changes in Netflix’s business model since its streaming debut.

In this article, we’ll explore why Netflix introduced ads, what the ad-supported plans offer, how the ads work, their impact on viewership, and whether choosing an ad-supported plan makes sense for you.

Why Does Netflix Have Ads Now?

Netflix’s decision to introduce ads stems from multiple business pressures and strategic opportunities:

Financial growth challenges: As the streaming market became increasingly crowded, Netflix faced slowing subscriber growth. By February 2025, the company needed new revenue streams beyond just subscription fees.

Competitive pressures: Rival platforms like Hulu, Paramount+, and Amazon Prime Video already offered ad-supported tiers, putting pressure on Netflix to provide similar options.

Cost-of-living considerations: With many households feeling financial strain, Netflix recognized the need for more affordable options. The ad-supported plan provides access at a lower price point while still generating revenue through advertising.

Market expansion: The cheaper entry point allows Netflix to reach viewers who previously found the service too expensive, potentially expanding their overall subscriber base.

Revenue diversification: Relying solely on subscription fees made Netflix vulnerable to market fluctuations. Advertising creates a second revenue stream, making the business more resilient.

As Netflix’s Chief Financial Officer recently told shareholders: “As we seek to grow engagement and deliver more value to our members, we’re also working to improve our monetisation by refining our plans and pricing. Key is ensuring that we have a range of prices and plans to meet a variety of needs.”

About Netflix With Ads Plan (New Pricing)

Netflix’s “Standard with ads” plan, priced at $7.99 per month in the US (prices vary by region), offers significant savings compared to ad-free options. For comparison, the cheapest ad-free option now costs $17.99 per month—a substantial jump of $10.

About Netflix with Ads Plan

The ad-supported plan includes:

  • Full HD (1080p) resolution
  • Ability to watch on two devices simultaneously
  • Download capability for offline viewing
  • Access to most of Netflix’s content library (with some exceptions due to licensing restrictions)

For existing subscribers on the discontinued “basic” plan ($10.99), Netflix is now automatically transitioning them to the ad-supported tier—a move that saves them money but introduces ads for the first time.

The pricing structure clearly pushes viewers toward either accepting ads or paying significantly more. The $10 gap between the ad-supported plan and the cheapest ad-free option has left many subscribers feeling frustrated, with some calling the company “money hungry” on social media.

How Often Do Netflix Ads Interrupt Shows?

Netflix has designed its ad experience to be less disruptive than traditional TV advertising. Here’s what viewers can expect:

  • “A few short ads per hour” according to Netflix’s official description
  • Ads appear before and during shows and movies
  • Some newer movies only have ads before they begin, not during playback
  • Ad breaks are positioned during “natural plot breaks” to minimize disruption
  • When pausing, viewers can see upcoming ad breaks marked on the progress bar
  • The number of ads in each break appears in the upper-right corner when an ad begins
  • Fast-forwarding or skipping isn’t available during ad playback

Netflix emphasizes that the ad experience is “short and seamless” with “just a few minutes of ads per hour.” The company notes this provides “enough time for a quick stretch or snack before diving right in.”

Importantly, ads don’t appear on Kids’ profiles, making the experience more family-friendly and addressing potential concerns about advertising to children.

Do Netflix Ads Affect Viewership?

The introduction of ads has had mixed effects on Netflix’s viewership and subscription numbers:

Positive impacts:

  • The lower price point has attracted new subscribers who previously found Netflix too expensive
  • According to Netflix’s reports, the ad-supported plan accounts for about half of all new sign-ups in countries where it’s available
  • The company has expanded its potential market by offering more flexible pricing options

Negative reactions:

  • Some long-term subscribers feel betrayed, as ad-free viewing was Netflix’s original selling point
  • Social media has seen complaints about the significant price jump required to maintain an ad-free experience
  • The automatic transition of “basic” plan subscribers to ad-supported viewing has sparked criticism

As one customer noted online after receiving notice of the change: “The $10 jump to maintain an ad-free viewing experience is unreasonable.”

Netflix is banking on most viewers accepting the trade-off between ads and savings. And early data suggests many are—the ad-supported tier has proven popular with new subscribers, though retention data isn’t yet clear.

Should You Choose Netflix With Ads Plan?

Deciding whether Netflix’s ad-supported plan makes sense for you depends on several factors:

Consider the ad-supported plan if:

  • Budget constraints make the $7.99 price point attractive
  • You don’t mind occasional interruptions during viewing
  • You value having access to Netflix’s content at a lower price
  • The improved video quality (full HD vs. the old basic plan’s standard definition) matters to you
  • You appreciate being able to watch on two devices simultaneously

Stick with (or upgrade to) ad-free plans if:

  • Uninterrupted viewing is important to your enjoyment
  • You frequently binge-watch multiple episodes or movies
  • You can comfortably afford the premium
  • You find ads particularly annoying or distracting
  • You watch primarily with others who dislike ad interruptions

Remember that the price difference is substantial—$11 more per month adds up to over $130 per year for ad-free viewing. For many viewers, the occasional ad may be worth the savings.

Conclusion: Netflix Added An Ad-supported Plan To Attract More Users

Netflix’s introduction of ads marks a significant pivot in its business strategy, moving away from its original identity as an ad-free alternative to traditional TV. This change reflects broader industry trends, with most streaming services now offering tiered pricing that includes both ad-supported and premium options.

While some viewers see this as Netflix abandoning its roots, others appreciate the more affordable entry point. The company is betting that most subscribers will either accept the ads or pay more for an ad-free experience, and early adoption numbers suggest they might be right.

As streaming competition intensifies and economic pressures continue, this hybrid approach may become the new normal. For consumers, it means more choices but also potentially more complex decisions about which services provide the best value.

Ultimately, Netflix’s move into advertising reflects the reality of today’s streaming landscape: the days of all-you-can-watch, ad-free content at low prices may be behind us. Instead, viewers now face choices between cost, convenience, and commercial interruptions across all major platforms.