Netflix is launching a new cheaper package with adverts next month and it will be priced at £4.99 a month.
The streaming giant's chief operating officer, Greg Peters, has announced that the new basic tier will be available in the UK from November 3. The adverts will be 15 or 30 seconds in length and will play before and during series and films, with an average of four to five minutes of adverts per hour.
A limited number of films and TV series will not be available due to licensing restrictions, but Netflix has said it is working on reducing this number. There will also be no ability to download titles, and the video quality will range up to 720p/HD on the new tier.
Customers will still be able to personalise their viewing experience and watch content on a range of TV and mobile devices, as per their current plans. The new tier will first be available in 12 countries - Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, the UK and the US.
Mr Peters said: "The timing is great because we really are at this pivotal moment in the entertainment industry and evolution of that industry. We've seen this gradual switch from linear to on-demand internet-based entertainment, but now that switch is happening at ever-increasing speed, to the point where now streaming has surpassed both broadcast and cable for total TV time in the United States."
He explained that a similar transition is happening across the world, including the UK, adding: "We at Netflix have a huge opportunity ahead to grow our viewing and to attract more subscribers and part of that is having a wide range of price and plan options for different viewer needs."
Netflix picked Microsoft to help deliver the commercials in the new tier and pledged to minimise the intrusions into customers' personal privacy that often accompany digital adverts. The streamer has said to help advertisers reach the right audience and ensure their adverts are more relevant for consumers, they will offer broad targeting capabilities initially by country and genre.
The streamer has said it will later collect data on gender and age when new customers sign up to help show more relevant adverts over time. Advertisers will also be able to prevent their adverts from appearing on content that might be inconsistent with their brand - such as titles which feature sex, nudity or graphic violence.
Asked how the streamer plans to ensure the adverts will not disrupt the viewing experience, Mr Peters said Netflix's internal content tagging teams will be used to find the natural break points within TV shows and films so that they can "deliver the ads in the least obtrusive point".
In relation with movies, he said there will be a "pre-roll ad experience" for the films recently added to "try and preserve that cinematic model", while movies that have been on the streamer for a while will have both before and during the movie adverts - but the breaks will be less frequent.