Image: Netflix

Netflix executives have confirmed that ads are definitely in the popular streaming service’s future. Speaking at the Cannes Lions advertising festival today, co-CEO Ted Sarandos discussed the future of his platform, telling Sway podcast host Kara Swisher that an ad-supported tier was in the works to counter some of Netflix’s recent failings, which include the loss of 200,000 subscribers in Q1 2022. Netflix expects to lose as many as 2 million subscribers in this quarter alone but hopes that the introduction of a less-expensive, ad-supported tier will bring in new customers. Competitors that include Paramount+, Hulu, and HBO Max already offer ad-supported options. A separate report published by The Hollywood Reporter today can also reveal that Netflix has laid off an additional 300 employees, a figure that amounts to 3% of its workforce.

“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 during the event. “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. Sarandos will also be honored this year with the Cannes Lions entertainment person of the year award.

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.

Source: The Hollywood Reporter

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