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Netflix confirms launching ad-supported cheaper subscription plans

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Netflix is all set to roll out its ad-supported subscription plans. This was confirmed by the company CEO Ted Sarandos in an interview at the Cannes Lions advertising festival, The Hollywood Reporter confirmed. Earlier, a report in The New York Times had also confirmed that the company is planning to launch the plans by the end of this year

Netflix Inc is in negotiations with multiple firms about advertising agreements,

co-CEO Ted Sarandos said on Thursday, as the streaming behemoth tries to boost subscriber growth by launching a lower plan with advertisements. According to media reports earlier this week, it was in talks with Alphabet Inc’s Google and Comcast Corp’s NBCUniversal about prospective marketing alliances. When asked which firm Netflix was hoping to work with, Sarandos remarked at the Cannes Lions conference, “We’re talking to all of them right now.”

Netflix announced in April

Netflix announced in April that it was seriously considering advertising after losing subscribers for the first time in a decade and expecting a 2 million drop in the following quarter.

“We will not be adding advertisements to Netflix as you know it today. We’re introducing a new ad tier for people who say, “Hey, I want a cheaper price and I’ll watch advertisements,” Sarandos stated during the Cannes Lions Festival.

The plan is aimed at people who think that Netflix is too expensive and who don’t mind ads, with no changes planned for the existing Netflix tiers. “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. “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 is already in talks with ad-sales partners,

and while Sarandos did not provide details on when the ad-supported tier might come out, Netflix has told employees internally that it is aiming for a launch before the end of 2022.

The Basic Netflix plan is priced at $9.99 and it offers 480p streaming, while the Standard plan is priced at $15.49 for a 1080p resolution. Netflix’s most expensive Premium plan, priced at $19.99 per month, is the sole tier that offers 4K HDR streaming. Netflix is the only streaming service that charges extra for improved streaming quality, and the ad-supported tier would presumably offer streaming quality similar to the Basic plan.

In addition to offering an ad-supported tier,

Netflix is planning on cracking down on account sharing. In select countries, Netflix has been testing an extra payment for those who share their Netflix accounts with people outside of their households.

Now, the question is which ad-sales company Netflix will partner with to help it enter the advertising business. Earlier this month the Wall Street Journal reported that NBCUniversal and Google were two top contenders. When asked during the Cannes interview, Sarandos wouldn’t be drawn on who Netflix might partner with (“We’re talking to all of them right now,” he said), but suggested the company could use a partnership as an interim measure while it builds out its own ad business, according to the WSJ.

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