Netflix affirms the existence of an ad-supported tier

Netflix affirms the existence of an ad-supported tier

Web Desk
June 25, 2022

Netflix affirms the existence of an ad-supported tier

Netflix co-CEO Ted Sarandos said ad-supported tier will launch by 2022.
Corporation lost 200,000 users between Q1 2022 and Q4 2021.
Netflix is launching a lower tier after losing customers for the first time in over a decade.

Netflix co-CEO Ted Sarandos said in an interview at Cannes Lions that the business will create an ad-supported tier to its streaming service. The corporation plans to launch the additional layer by 2022.

As Sarandos said, “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,’”

Added, “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.’”

Since co-CEO Reed Hastings stated he’d be open to the concept in April, many expected from the App to debut an ad-supported membership tier.

Netflix is launching a lower tier after losing customers for the first time in over a decade. Comparing Q1 2022 to Q4 2021, the corporation lost 200,000 users. It still has 222 million customers, but the decline has caused the App to reassess its commercial policy.

Which ad-sales company will the App collaborate with to enter advertising? NBCUniversal and Google were prominent competitors, according to the Wall Street Journal. Sarandos wouldn’t say who it would collaborate with (“We’re talking to all of them right now”) but hinted the firm might utilise a partnership as an interim solution as it builds up its own ad business.

Sarandos was questioned if Netflix’s plummeting share price may lead to a takeover. The CEO said it’s “always a reality,” but the firm has all it needs to return to growth. He also downplayed speculations that Netflix may purchase Roku. Sarandos remarked, “We don’t need it.”

Netflix aims to debut a lower, ad-supported tier, like competitor Disney Plus, before the end of the year. Disney’s ad-supported tier will launch in the US initially, then worldwide in 2023. Ads will be limited to four minutes per hour. Netflix and Disney haven’t released pricing for their new tiers.