Netflix is working on an ad-supported tier. Speaking at the Cannes Lions advertising festival earlier this week, Netflix’s co-CEO Ted Sarandos said the streaming giant will not add ads to Netflix as it is today, but the ad-tier is for those users who want a lower price.
“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 as quoted by the Hollywood Reporter.
“We are still in the early days of deciding how to launch a lower priced, ad supported option and no decisions have been made. So this is all just speculation at this point,” a Netflix spokesperson further said in a statement to Engadget.
In a post earnings call for the January-March quarter, Netflix co-CEO Reed Hastings had hinted at the same.
Hastings had said, “I’m a big fan of the simplicity of subscription. But as much as I’m a fan of that, I’m a bigger fan of consumer choice and supporting consumers who would like to have lower prices and are advertising-tolerant to get what they want.”
The company will figure that out over the next year or two, he had further said, adding, “Think of us as quite open to offering even lower prices with advertising.”
This comes as Netflix had reported a decline of nearly 2,00,000 subscribers in the January-March quarter. It is also predicted that Netflix will lose an additional 20 lakh subscribers in the current quarter.