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Netflix is definitely getting an ad-supported subscription option

Seemingly in a bid to appeal to a wider audience Netflix has confirmed that it is working to launch an ad-supported subscription tier.

This was confirmed by Netflix co-chief executive officer Ted Sarandos at the Cannes Lions advertising festival this week.

This doesn’t mean that Netflix will now slot ads in between episodes of Stranger Things for every subscriber. Rather, there will be a subscription tier which is discounted but will have advertising.

“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 told 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.'”

Neither what this tier would look like nor how many adverts subscribers will be subject to is known for now.

While Sarandos is attending the Cannes Lions advertising festival to receive the Cannes Lions’ Entertainment Person of the Year award, he’s also likely shopping for an advertising partner. To that end, The Hollywood Reporter reveals that the streaming service is in talks with potential ad-sales partners.

Could a lower priced tier with advertising be the thing Netflix needs? Maybe. The firm is struggling to keep subscribers onboard and this is leading to job cuts so any sort of uptick in subscriber numbers is going to be good for the firm.

Something we’d be curious to see is whether Netflix will build on this idea and launch a mobile subscription supported by advertising. The platform already offers a mobile only plan for R49 per month, but with advertising that price could drop lower and potentially spur growth in emerging markets.

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