Netflix’s co-CEO Ted Sarandos has confirmed that the corporate plans to introduce an ad-supported tier to its streaming service in an interview on the Cannes Lions promoting pageant, reports The Hollywood Reporter. The New York Times reported last month that the corporate is aiming to roll out the brand new tier by the tip of 2022.
“We’ve left a big customer segment off the table, which is people who say: ‘Hey, Netflix is too expensive for me and I don’t mind advertising,’” Sarandos mentioned. “We [are] adding an ad tier; we’re not adding ads to Netflix as you know it today. We’re adding an ad tier for folks who say, ‘Hey, I want a lower price and I’ll watch ads.’”
The streaming service has been extensively anticipated to launch an ad-supported subscription tier for its service ever since its different co-CEO Reed Hastings mentioned he’d be open to the idea in April.
Netflix’s plans to launch the brand new, cheaper tier follows information that it misplaced subscribers for the primary time in over a decade last quarter. The firm reported a lack of 200,000 subscribers in Q1 2022, in comparison with the fourth quarter within the earlier 12 months. It stays the most important streaming service with roughly 222 million subscribers, however the loss has compelled Netflix to rethink its traditionally hardline stance in opposition to adverts.
Now, the query is which ad-sales firm Netflix will accomplice with to assist it enter the promoting enterprise. Earlier this month the Wall Street Journal reported that NBCUniversal and Google had been two high contenders. When requested through the Cannes interview, Sarandos wouldn’t be drawn on who Netflix may accomplice with (“We’re talking to all of them right now,” he mentioned), however advised the corporate may use a partnership as an interim measure whereas it builds out its personal advert enterprise, according to the WSJ.
Sarandos was additionally requested if Netflix’s tanking share value may make the corporate the goal of a takeover. In response, the manager mentioned that it is “always a reality,” however claimed the corporate has every thing it must return to progress beneath its personal steam. He additionally dismissed recent rumors that Netflix may very well be seeking to purchase a streaming {hardware} firm like Roku. “We don’t need it,” Sarandos mentioned, in keeping with the WSJ.
Netflix’s plans for a less expensive, ad-supported tier, mirror those of rival Disney Plus, which additionally hopes to launch an identical providing by the tip of the 12 months. Disney’s ad-supported tier will come to the US first, earlier than increasing internationally in 2023, and the corporate plans to restrict adverts to four minutes per hour. Pricing for each Netflix and Disney’s new tiers is but to be introduced.
Disclosure: The Verge is presently producing a sequence with Netflix.
