Rumours about Netflix launching an ad-supported subscription tier for its video-streaming service have been rife for the last couple of months. In April this year, Netflix’s CEO Reed Hastings had even acknowledged the need to incorporate low-end subscription plans with advertisements. However, nothing was confirmed.
Netflix Co- CEO Ted Sarandos confirmed that Netflix will soon launch a new ad-supported subscription tier. The new tier will reportedly be ad-supported, and this will enable the streaming company to reduce subscription fees eventually.
Ted Sarandos was taking part in an interview at the Cannes Lions advertising festival. He discussed the new plans of Netflix. He said that the new ad-supported subscription tier will attract new and more customers, which will increase the number of subscriptions.
According to a report by The Hollywood Reporter, Sarandos said that they left a big customer group who found the subscription amount expensive but didn’t mind seeing ads. And the new ad-supported tier is targeting those customers.
He also added that the ad service would not affect any subscribers who are already part of their premium subscription.
Ted Sarandos also said that they have already started reaching out to potential ad sales partners. Some media reports suggest that the company is currently in talks with Google regarding a new ad-supported subscription plan.
PRICING OF NEW AD-SUPPORTED SUBSCRIPTION PLAN
Even though Mr Sarandos revealed Netflix’s plans to bring in ads, and about ongoing talks, he did not share any information regarding the pricing of the new plans.
There has been no statements or press release from Netflix so far regarding the new plans and pricing.
Currently, Netflix’s subscription costs between $9.99 and $19.99.
NETFLIX’S FALLING SUBSCRIBER BASE
In the last quarter, the online streaming service company lost nearly 2,00,000 subscribers. In percentage terms, that is a decrease in the value of the company by almost 70%.
The recent fall in subscribers has led to a decrease in the share price of Netflix, which has triggered rumours of a buyout. Share prices dived from $600 per share in January 2022 to near $180 on Thursday.
About buyout, Ted Sarandos told The Hollywood Reporter that there are chances of a buyout in this current situation, And that company is keeping its eyes wide and open.
He added that there are many possible ways in which a company can grow their businesses and increase its scale and profitability.
Netflix currently has 203.66 million subscribers.