Now it’s official: Ted Sarandos – Netflix’s co-CEO – has confirmed that advertising will be integrated into the streaming service. Reports leaked back in May that Netflix wanted to integrate advertising into its service.

New subscription level

Insiders had hinted that a cheaper subscription tier for Netflix would be made possible by including advertising. Sarandos has now confirmed that these rumors are true.

As recently as March, Spencer Neumann, Netflix’s chief financial officer, was asked about the prospect of a cheaper ad-supported tier. However, he said at the time that this was “not in the plans at the moment [der Marke] included”. It’s clear that Netflix has had to adapt quickly.

It’s been a rough couple of months for the streaming giant: its latest earnings report revealed its biggest loss in nearly 10 years. Shortly thereafter, the company managed to lose $50 billion of its value in less than 24 hours. Now on stage during the Cannes Lions industry festival, Sarandos said Netflix hopes to attract a “large segment of customers” with this new offering.

He also stressed that the ad-supported tier will be an entirely separate offering. So the ads will not suddenly appear on existing Netflix accounts.

Explaining the upcoming ad-supported Netflix model, Sarandos said: “We left a large segment of customers off the table, namely the people who say, ‘Hey, Netflix is ​​too expensive for me and I don’t mind advertising’. We’re adding an advertising layer, we’re not adding advertising to Netflix as you know it today. We’re adding an ad layer for people to say, ‘Hey, I want a lower price and I’ll see ads.’”

Categorized in: