Netflix’s co-CEO Ted Sarandos has confirmed that the company plans to introduce an ad-supported tier to its streaming service in an interview at the Cannes Lions advertising festival, reports The Hollywood Reporter. There were rumours about Netflix’s intention to launch this service some time ago but the confirmation puts it ahead.
“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 said Thursday, speaking on the Cannes Lions stage with Sway podcast host Kara Swisher. “We 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.’”
Netflix’s plans to launch the new, cheaper tier follow news that it lost subscribers for the first time in over a decade last quarter. The company reported a loss of 200,000 subscribers in Q1 2022, compared to the fourth quarter in the previous year. It remains the largest streaming service with roughly 222 million subscribers, but the loss has forced Netflix to rethink its historically hardline stance against ads.