You get what you pay for, the saying goes, and Netflix seems determined to prove that point with a cheaper, ad-supported tier that also comes with a smaller and worse catalog.
As Protocol reports, the backbone of the ad-supported tier appears to be Netflix Originals. Many of the company’s existing contracts for third-party content would allow other companies to take a slice of the advertising pie, and although co-CEO Ted Sarandos has tried to renegotiate these agreementsit’s hard to convince other companies to voluntarily take less money.
“We will be removing additional content, but definitely not everything,” Sarandos said. “But I don’t think that’s a big drag on the business.”
He added: “The vast majority of what people watch on Netflix, we can include in the ad-supported tier today. There are things that [we wouldn’t], which we are in talks with the studios on. But if we launched the product today, members of the advertising level would have a great experience. »
Microsoft will sell all ads served on the service, and that tier will roll out to select markets in early 2023. “We’re launching first in countries that have more mature ad markets,” said Greg Peters, chief product and operations. Noted.
Sarandos previously described the target audience as “people who say, ‘Hey, Netflix is too expensive for me and I don’t mind advertising.’
The company needs a turnaround, after a dismal first quarter that saw its first loss of subscribers in 11 years with a second quarter in which it lost an additional million subscribers worldwide.