Netflix will launch its $6.99 tier with ads on November 4

Australians willing to watch ads during Netflix will soon pay less as the streaming giant rolls out a new lower-cost subscription tier.

Australians will soon begin to watch Netflix series and movies with advertisements as the US-streaming giant rolls out a new lower-cost subscription tier.

The new ad-based model will see viewers slugged with about four minutes of ads for each hour watched, with the average advertisement spanning 15 to 30 seconds in length.

Australia is one of 12 markets which will see the new lower cost service rolled out on November 4 at a rate of $6.99 per month.

Ads will be targeted broadly with certain ads to target genres such as action, drama, romance and sci-fi films and series.

Advertisers will also be able to limit where the ads appear if they wish not to associate with sex, nudity or graphic violence, said Netflix chief operating officer Greg Peters.

Netflix’s ad-supported subscription services in early November, is expected to be about a month before rival Disney+ does the same. Picture: Chris Delmas/AFP

The model will also be rolled out in Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, the UK and the US. The quality of the service will be 720p/HD.

Netflix has toyed with the idea of introducing advertisements for some months on the back of subscribers losses over the past two years.

According to market and consumer data company Statista, Netflix has lost about 1.13 million users over the past six months alone. The majority of the streaming giant’s subscribers reside in the US or Canada, which make up about 73 million of the 220.67 million subscribers the company had around mid-year.

In April this year Netflix reported a major decline, losing 200,000 subscribers alone in the first three months of the year.

The company, once a scrappy upstart that took down Blockbuster, expected to lose another 2 million in that quarter alone. Netflix faced similar challenges as the video rental giant, with ballooning production costs and customers who were keen to cut their spending amid interest rate hikes and inflation.

The new subscription tier with ads will compete with other streaming services Amazon Prime and AppleTV which charge $6.99 and $7.99 per month, respectively.

Disney+ is also expected to offer a subscription model with advertisements. Picture: Patrick T. Fallon/AFP

Australians are no stranger to advertisements on streaming services, with all of the major television networks having introduced ads on their free streaming services.

Entertainment giant Disney, which introduced streaming service Disney+ to Australia and New Zealand in November 2019, has also signalled it will offer a subscription model with ads.

The company has not yet said when Disney Plus Basic will launch locally but the service is live in the US where it $US7.99 ($AU12.69) per month which is higher than the local ad-free rate of $11.99.

Earlier this year Netflix announced a crackdown on subscribers who share their login details with people who live outside of their home. A new “sub-account” fee would cost between $US2 to $US3, Netflix said.

The issue is one that many streaming services face, with family-style subscription plans often shared by friends who gain access to cheaper subscription models.