How ads on Netflix will work - from as soon as November

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Netflix hasn't said much about its plan to add commercials, other than it intended to introduce a new lower-priced ad-supported subscription plan for consumers next year.

But now the Wall Street Journal is reporting that buyers have been told Netflix will launch advertising in November - which would gazump Disney, which is scheduled to introduce advertising to its Disney+ streaming service in December for its US customers.

The House of Mouse has no timeline yet for the rest of the world, including NZ, but Netflix reportedly wants to launch its ad platform in multiple markets at once to exploit its global reach.

Initially, Netflix plans to sell 15- and 30-second ads that will appear before and during some programmes, the Journal says, quoting un-named ad buyers who have seen the streaming giant's presentation.

Netflix is looking to keep the ad load to four minutes for every hour of programming.

Ad buyers told the Journal they have been offered the ability to target specific sets of users, but said it is less granular than what they have grown accustomed to with online ads.

Regardless, Netflix wants to charge a CPM (cost per 1000 views of an ad) of US$65, buyers said, which is described as "substantially higher than most other streaming platforms".

Netflix wants brands to commit to a year-long upfront ad buy, the Journal says, but has also set a US$20 million annual spending limit to avoid ads for any given brand becoming too repetitious.

Analysts assume the streaming giant will follow the ad-supported version of Hulu (and TVNZ+ here) and make its ads unskippable.

It's also expected that those on the lower-cost, ad-supported plan won't get the option to download shows, offered by Netflix with selected content today.

Disney+ subscribers in the US currently pay US$7.99 a month for an ad-free stream.

Ads will be introduced on that US$7.99 plan from December.

Disney says those who want to remain commercial-free will be able to upgrade to a new US$10.99 plan (that is, pay a 38 per cent premium).

The Journal says while the ad-supported version of Disney+ will be US-only at first, Netflix wants to introduce its ad-supported plans to multiple markets by the end of this year.

In terms of the price of Netflix's ad-supported plans, or whether those on its existing plans will have to stomach a price increase to avoid the commercials, a la Disney+, we'll just have to stay tuned.

Disney's three services (Disney+, Hulu and ESPN+) added 14 million subs in the June quarter for a total of 221.1 million worldwide - a nose ahead of Netflix, which lost 1 million to finish the quarter on 220.1 million.

Netflix hopes its cheaper, ad-subsidised plans will help it restore its lead.

None of the global streaming services break out New Zealand numbers, but Nielsen and Roy Morgan recently extrapolated their viewership based on surveys of Kiwis, while Nielsen has also added hardware to measure streaming on every device in the 500 households on its people meter panel. See the latest Nielsen and Roy Morgan stats here.