Netflix confirms that an ad-supported tier is indeed happening

Netflix co-CEO Ted Sarandos has confirmed that the company plans to introduce an ad-supported tier for its streaming service in an interview at the Cannes Lions advertising event. Hollywood Reporter, new York Times It was reported last month that the company is targeting to roll out the new level by the end of 2022.

“We’ve left a huge subscriber segment off the table, people who say: ‘Hey, Netflix is too expensive for me and I don’t mind advertising,’” Sarandos said. “We [are] Adding an ad level; We are not adding ads to Netflix as you know it today. We’re adding an ad tier for people who say, ‘Hey, I want a lower price and I’ll see the ad.’”

The streaming service has been widely expected to launch an ad-supported subscription tier for its service, ever since its launch. other Co-CEO Reed Hastings said he would be up for the idea in April.

“We’re adding an ad tier for people who say, ‘Hey, I want a lower price and I’ll see the ad.’”

Netflix’s plans to launch a new, cheaper tier follow news that it lost subscribers for the first time in a decade last quarter. The company reported a loss of 200,000 customers in Q1 2022 compared to the fourth quarter of the previous year. It remains the largest streaming service with nearly 222 million subscribers, but the loss has forced Netflix to rethink its historically harsh stance against commercials.

Now, the question is, which ad-sales company will Netflix partner with to help it enter the advertising business. earlier this month wall street journal reported that NBCUniversal and Google were the two top contenders. When asked during a Cannes interview, Sarandos wouldn’t be drawn to who Netflix might partner with (“We’re talking to all of them right now,” he said), but suggested the company could take an interim measure. can use as a partnership while it creates its own advertising business as per WSJ,

Sarandos was also asked whether Netflix’s tanking share price could make the company an acquisition target. In response, the executive said this is “always a reality” but claimed the company has everything it needs to return to growth under its steam. He also dismissed recent rumors that Netflix might be looking to buy a streaming hardware company like Roku. “We don’t need it,” Sarandos said, according to WSJ.

Netflix’s plans for a cheaper, ad-supported tier are similar to those of rival Disney Plus, which also expects to launch a similar offering by the end of the year. Disney’s ad-supported tier will come to the US first, before expanding internationally in 2023, and the company plans to limit commercials to four minutes per hour. Pricing for the new tiers from both Netflix and Disney has yet to be announced.

Disclosure: ledge Currently producing a series with Netflix.

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