Confirmed: Ads are coming to Netflix. Netflix’s co-CEO Ted Sarandos, speaking at the Cannes Lions advertising festival Thursday, confirmed that the compny will offer a cheaper, ad-supported tier. No word yet as to when the new tier will launch or how much it will cost per month.
Netflix had long been averse to advertising on its subscription service, but after posting disappointing figures last quarter that showed it lost 200,000 subscribers, the company said it would be introducing a less-expensive, ad-supported tier to its service in a bid to bring in new customers.
“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 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.’”
Netflix’s presence at Cannes Lions — this is the first time the streamer has attended the global advertising confab — is a clear sign the company is looking to embrace the ad industry. Sarandos confirmed that the company is in talks with potential ad-sales partners.
It remains to be seen if a new advertising tier will prove the solution to Netflix’s growth problems. As the company’s share price has tanked, there has been growing speculation that the streamer could be the target of a takeover.
MacDailyNews Take: Apple’s focus on high quality films and series will further differentiate ad-free Apple TV+ from the likes of Netflix.
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