Netflix with ads has a huge catch — let me explain

Netflix on phone
(Image credit: Shutterstock)

Yesterday (Oct. 13), news broke that Netflix with ads is coming. And once I learned all of the details surrounding it, I wondered "why even bother?"

Netflix's ad-supported tier is set to arrive November 3, and it's one of Netflix's two strategies to fight its subscriber number woes. As you may have heard, Netflix's overall Q1 2022 numbers were the first time it actually lost subscribers overall. That, for CEO Reed Hastings, is a no-no. Netflix is one of the best streaming services, and it's not going in a downward-direction without a fight.

In addition to offering a cheaper, ad-supported Netflix to subscribers, Netflix is also trying to sway people into paying more money for Netflix. Yes, that doesn't sound right, but it's the crux of Netflix's new plan to stop people from sharing passwords, by asking them to pay a small surcharge. The days of "Love is sharing a password" are truly over.

While account-sharing doesn't matter much to me, I'm more shocked by Netflix's ads plan. While I pay for ad-free YouTube Premium, I also have the ad-supported Hulu. I am no stranger to watching ads. I'm OK with it. And I'm not going to scoff at $3 per month back in exchange for ads. That said, Netflix's plan has one giant flaw (and two smaller, annoying issues, too). So, let's break it all down. 

Netflix with ads has one giant flaw

You don't get your video quality downgraded to get the ad-supported versions of Hulu, HBO Max, Paramount Plus or Peacock, but I guess Netflix is just in a league of its own and can make its own rules.

I want to spend less on Netflix, but ads are the only change I'm willing to take. And that's a problem for Netflix's ads plan, aka Netflix Basic with Ads. As anyone familiar with the previous lowest-level Netflix tier, that new name "Netflix Basic with Ads" holds the big clue to why some won't want to get Netflix with ads.

Netflix is only offering ad-supported plans for those willing to have the lowest-level Netflix, and its 720p (formerly 480p) HD streams. Yes, in Netflix's infinite wisdom, it's ignoring those of us who want to watch Full HD or 4K content. 

Finn Wolfhard as Mike Wheeler in STRANGER THINGS 4

I'm as confused as Mike Wheeler. (Image credit: Netflix)

As one of my colleagues pointed out, "What streaming service limits you to 720p?" To which I replied, "Shudder, but that's because some of their content is only available in 720p, if not 480p." But that's neither here nor there.

You don't get your video quality downgraded to get the ad-supported versions of Hulu, HBO Max, Paramount Plus or Peacock, but I guess Netflix is just in a league of its own and can make its own rules. And those other services offer $5 to $7 discounts for watching their ad-supported versions. Disney Plus is going to be $3 less with ads.

In a way, I understand the math here. Netflix wants to attract people who think $9.99 per month is too much for Netflix. Put another way, it sees the folks who spend $5 per month on ad-supported Peacock or Paramount Plus as its main targets.

But what about retaining those subscribers who have a higher threshold for visual fidelity? Does Netflix think anyone with a Full HD or 4K TV is just swimming in the money? I may not be flat-broke, but I'm not Scrooge McDuck. 

The other Netflix with ads flaws

The other issues seem more unavoidable. Netflix (opens in new tab)'s announcement post notes that "a limited number of movies and TV shows won't be available due to licensing restrictions, which we’re working on." Without a list of specific unavailable titles, this gives me some pause before signing up. 

On top of that, there's an even bigger annoying flaw: Netflix with Ads won't let you download programming for offline. I get why this is the case. Users need to be online to get those ads, as services are always changing the ads served to customers. 

Outlook: Yes, Netflix needs more pricing tiers

Netflix's announcement ends with the statement "We’re confident that with Netflix starting at $6.99 a month, we now have a price and plan for every fan." To which I say, don't ignore the people who want to see your shows as your creators intended.

Were Netflix to offer $12.49 for Standard with Ads and $16.99 for Premium with ads, I probably wouldn't be writing this piece. I'd just be giving Netflix less money. This feels like a self-inflicted mistake, and one based around wanting to make sure those who pay for 4K or 1080p don't start paying less.

Hopefully, Netflix will see the benefit of more ad-supported pricing options. It may make for a more-complicated pricing chart, but you win good will with customers by giving them more choice. And the choice between 4K ad-free Netflix and 720p Netflix  with ads is no choice at all, if you ask me.

Next: Here are the 10 best shows and movies to watch this weekend. Plus, when is Rick and Morty season 6 episode 7 coming? Looking for something to watch? Here are the 7 best shows with 100% Rotten Tomatoes scores on Netflix, HBO Max and more.

Henry T. Casey
Senior Editor

Henry is a senior editor at Tom’s Guide covering streaming media, laptops and all things Apple, reviewing devices and services for the past seven years. Prior to joining Tom's Guide, he reviewed software and hardware for TechRadar Pro, and interviewed artists for Patek Philippe International Magazine. He's also covered the wild world of professional wrestling for Cageside Seats, interviewing athletes and other industry veterans.