During an interview at the Cannes Lion advertising festival, the Netflix CEO Ted Sarandos gave the most direct indication that it will launch a cheaper, ad-supported subscription tier for the controversial streaming service.
In essence, Mr Sarandos said the company “add an ad layer; we don’t add ads to Netflix as you know it todayAfter the pandemic boost wore off, Netflix ran into subscriber problems as people spent less time watching TV shows and movies.
At the same time, new streaming services from juggernauts like HBO, Disney or Apple grew to rival Netflix as it continued to spend billions of dollars in borrowed content creating. Well, those crazy content releases were curtailed, a lot of shows were canceled and now Netflix will try to increase its subscriber base by going downmarket.
Currently, Netflix plans start from the basic version for $9.99 per month with SD image quality (up to 480p), followed by the standard $15.49 per month plan that offers 1080p definition, and move up to the Premium Netflix plan. low at $19.99 per month, which includes streaming in 4K UHD quality on up to four devices.
In addition to cracking down on password sharing, Netflix will likely introduce the new ad-supported subscription tier on something close to… Apple TV+ subscription price of $4.99 and will try to recoup the difference with ad revenue. Or, as Ted Sarandos aptly puts it:
We’ve left a large customer segment off the table, which is people who say, “Hey, Netflix is too expensive for me and I don’t mind advertising.” We add an ad layer; we don’t add 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 watch ads.”