Anyone looking at saving some money on their streaming bills might be in luck as Netflix has officially confirmed that its cheaper ads-based tier is on the way.
The move was revealed by Netflix co-CEO Ted Sarandos (via THR (opens in new tab)) while speaking at the Cannes Lions advertising festival. It's something many of us had expected after it was reported in April by Netflix's other co-CEO, Reed Hastings, that the company was looking into the payment method.
"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,'" said Sarandos. "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."
This is the first time that Netflix has attended the advertising element of Cannes Lions, further showing its intent to experiment with advertising. No date or timeline for ads has officially been provided by Netflix, although the platform has reportedly told employees that it intends to set them live before the end of 2022.
This decision also comes in the wake of Netflix making a further 300 layoffs (via Variety (opens in new tab)) at the company, following its loss of 200,000 subscribers earlier this year. Netflix has approximately 11,000 employees located around the world. It also made a further 150 layoffs in May on top of letting go dozens of contractors and part-time workers.
Speaking of the difficulties Netflix has faced ahead of the layoffs, Sarandos said: "We’ve gotten through experiences where the market disconnects from [our] core business and you have to prove the thesis still works, and is going to work long-term. There’s a lot of uncertainty in the world today, and if they get anything that rocks the foundation of the narrative, they get nervous."
A Netflix standard plan costs $15.49 / £10.99 / AU$16.99 per month, while its cheapest basic plan is available at $9.99 / £6.99 / $10.99 but supports fewer devices and does not offer HD. How much Netflix will make consumers pay for the price of watching its shows and movies with ads is unclear at this time.
It's been a rough couple of months for the streaming service, as it continues to cancel numerous Netflix original shows. I'm still not personally over the unexpected end of GLOW, which happened a couple of years back.