Netflix faces a huge loss in subscribers resulting from such a negative impact on password sharing, so, it decides to join the other streaming services who already started their ad-supported tier. Recently The Hollywood Reporter confirms, that Netflix’s co-CEO Ted Sarandos revealed at the Cannes Lions advertising the festival that the company is intending to roll out the latest tier at the end of 2022.
Sarandos said, “We have 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’” he also added, “We are adding an ad tier; we’re not adding ads to Netflix as you know it today. We are going to add an ad tier for folks who say, ‘Hey, I want a lower price and I’ll watch ads.'”
The internal memo of Netflix has obtained by The Newyork Times in May that just indicating the management to launch the new ad-based tier in this early October. At that exact time, Netflix set to boost the efforts to stop password-sharing, a mission that the company is pursuing already. CNBC at Cannes confirms, that Netflix met with Google, Comcast, NBCUniversal, and Roku to discuss the potential of marketing partnerships.
In this Mat, AMC Networks interim CEO Matt Blank had scoffed at Netflix’s belief that an ad-supported tier alone can move their problem around. Blank told, “it’s funny when you hear one other large player having trouble…all of a sudden, an ad tier is going to solve all problems? We don’t think that’s true, but we will certainly monitor it.”
At Cannes Lions, Sarandos provides some hints that Netflix is turning to ad-supported tiers not as a Panaca but as an experiment. The executive also insists that Netflix’s Q1 just faced the loss of about 200,000 subscribers, which means the loss of 2 million in Q2, and as a result stock freefall having such ups and downs on the young business of the online streaming.
Sarandos said, “We have gotten through experiences where the market disconnects from the core business and you have to prove the thesis still works and is going to work long-term” he also added, “There is a lot of uncertainty in the world today, and if they get anything that rocks the foundation of the narrative, they get nervous.”
A big thanks for the source.
