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Netflix CEO Confirms Ads Are Coming To The Streaming Service

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Netflix CEO Confirms Ads Are Coming To The Streaming Service

Netflix co-CEO Ted Sarandos has confirmed that adverts are coming to the streaming service as part of its vision for the future.

It's been a tough year for the biggest name in streaming, as it lost around 200,000 subscribers in the first quarter of 2022 and is expected to shed even more over the next few months.

This is the first time the overall number of people subscribed to Netflix has dropped, causing concern that the streaming giant may have plateaued or is seen as an unnecessary expense in a cost of living crisis.

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On top of that the price keeps going up, making people think even harder whether they want to stay subscribed, not to mention the platform's recent crackdown on password sharing.

The solution proposed by Ted Sarandos, co-CEO of Netflix, is to introduce a less expensive tier of subscription with adverts on the platform.

Netflix's share price has fallen recently, as has their subscriber count. Credit: Shutterstock
Netflix's share price has fallen recently, as has their subscriber count. Credit: Shutterstock

According to the Hollywood Reporter, Sarandos confirmed at the Cannes Lions advertising festival that the streaming service had already started talks with potential advertisers.

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The CEO explained the shift in Netflix's stance, which for a long time had resisted hosting adverts on the platform and relied on subscriptions to bring in money.

He said: "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'."

"We're 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'."

He also discussed the possibility that Netflix might get bought out at some point in the future as the company's stock price has tumbled since the beginning of the year.

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Netflix plans to introduce a cheaper tier of subscription which allows adverts. Credit: Shutterstock
Netflix plans to introduce a cheaper tier of subscription which allows adverts. Credit: Shutterstock

At the end of 2021, each Netflix share was worth more than $602, whereas today the share price is around $180 each.

You'd have to go back to 2017 to find the last time shares in Netflix were worth as little as they have been since prices dropped this year.

Sarandos admitted the chances that someone might buy out Netflix are 'always a reality' but he insisted the streaming giant had it in them to return to prosperity by itself.

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Introducing a lower-paying tier with adverts in them is not new; according to The Verge, rival streamer Disney+ has already drawn up plans for a cheaper subscription at the cost of ads interrupting the show.

Disney's ad subscription package is due to come into effect later this year, though Sarandos offered no details on the timetable Netflix has for bringing in adverts.

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Featured Image Credit: Shutterstock/Netflix

Topics: News, Netflix

Joe Harker
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