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Netflix's Ad-Supported Tier May Block Download of Shows and Movies for Offline Viewing

Netflix is planning to roll out the ad-supported level by early next year.

Netflix's Ad-Supported Tier May Block Download of Shows and Movies for Offline Viewing

Netflix has been losing customers and faces competition from Walt Disney, Amazon, and Warner Bros.

Highlights
  • Netflix is strictly limiting the frills on the ad-based service
  • Netflix has been losing customers
  • Netflix's app has additional hidden references to its ad expansion

Netflix isn't planning to let users of its new ad-supported tier download shows and movies to their devices for offline viewing, according to code found inside of the company's iPhone app, removing a feature that customers enjoy on its regular service.

The move suggests Netflix is doing what it can to distinguish the upcoming service from its current offerings. The streaming giant, which eschewed advertising for years, is planning to roll out the ad-supported level by early next year. But hints about the new service are already reflected in code hidden within its iPhone app.

“Downloads available on all plans except Netflix with ads,” according to text in the app that was discovered by developer Steve Moser and shared with Bloomberg News. The 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.

Netflix declined to comment. Given that the service's launch is several months away, it's likely that the company's plans aren't yet final and its approach could still change.

Still, the early clues suggest Netflix is strictly limiting the frills on the ad-based service. With its regular plans, users can download content for viewing in places without reliable internet access, such as airplanes. The lack of that option could help Netflix upsell users to its higher-end tiers after it hooks them on the ad-supported version. The Los Gatos, California-based company has already said that it won't offer all of its content on the ad tier.

Netflix has been losing customers and faces competition from Walt Disney, Amazon, and Warner Bros. Discovery's HBO Max. Last quarter, it shed 1.3 million customers in the US and Canada, its biggest region.

Rival services such as Disney's Hulu, Warner Bros.' HBO Max, and Comcast's Peacock already rely on ad-supported tiers to fuel growth. The budget versions of services like HBO Max also turn off the downloading option.

Netflix's app has additional hidden references to its ad expansion, including text about helping Netflix tailor ads to specific users. “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!” one message reads.

The ad-supported tier will provide a cheaper alternative to customers scared off by the service's rising prices. The service's premium level, which offers 4K resolution and up to four streams at the same, is $20 (roughly Rs. 1,600) a month in the US.

Netflix has previously said the ad-based service will be available in multiple regions and that Microsoft will serve as its sales and technology partner for the advertising system.

© 2022 Bloomberg LP


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