Netflix Co-CEO Confirms Plans for Cheaper Ad-Supported Netflix Tier

[MacRumors]

Netflix is planning to implement a more affordable ad-supported tier to draw in customers who do not want to pay the $9.99 starting price for an ad-free plan, Netflix co-CEO Ted Sarandos confirmed at the Cannes Lions advertising festival today (via The Hollywood Reporter).

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 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.

In the first quarter of 2022, Netflix said that it lost subscribers for the first time in 10 years. Revenue growth "slowed considerably," which the company blamed on "a large number of households sharing accounts" and "competition." Netflix estimates that 222 million paying households are sharing with an additional 100 million households that are not being monetized. Netflix has confirmed that it plans to implement "more effective monetization of multi-household sharing" in the future.

Sarandos said that he believes Netflix could return to growth with the changes that are planned. "We have plenty of scale and profitability and free cash flow to continue to grow this business," he said, suggesting that there's "still a lot of room to grow."

Article Link: Netflix Co-CEO Confirms Plans for Cheaper Ad-Supported Netflix Tier

 

[jimbobb24]

I love Netflix so hope this does not degrade the service. They have done a solid job with their animation for children and it’s a hit in the home. And Black Mass was amazing.

 

[Dan From Canada]

My daughter attending university on the other side of the country used our family account.
We have since cancelled Netflix because of "sharing".

 

[now i see it]

while people who can’t afford another $5/month aren’t going to buy anything that’s advertised anyway.
The ones getting shafted are the advertisers (which is good)

 

[TheYayAreaLiving 🎗️]

It's a little too late. Netflix is going to have to match competitive prices like Apple TV+ and such. Also, no hidden fee's please.

I've already cancelled my Netflix membership long time ago. Lost my trust.

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[LeeW]

If they implement them properly it will probably work and bring in a lot of customers.

 

[kasei]

Cancelled and not going back. The fact they charge extra for 4K content is a joke.

 

[StudioG]

The key takeaway here is that potential Netflix customers who are OK with ads start their sentences with "Hey."

 

[Spaceboi Scaphandre]

Remember when Netflix and other subscription services were cheaper than cable while still not having ads? Those were the days

 

[russell_314]

This is how it starts 😂

 

[cjgrif]

$5/month, with ads, 360p, only a half stream at a time (your choice - right half or left half of each frame) /s

 

[FasterQuieter]

My first question is what resolution will the ad tier be? If it's 480p then it would be a no for me no matter how little it cost. But if it isn't 480p and the $9.99 tier is, that would mean paying less and getting a better picture. That would seem weird.

 

[groove-agent]

I'd like to drop Netflix from our list of streaming services. It hasn't had anything I've wanted to watch for over a year. However, there are a couple girly shows my wife watches so we have to keep it for now.

My favourite is Crave at the moment. It has all the popular shows I watch: Big Bang Theory, Friends, Game of Thrones etc.

 

[MrTechAdvice]

Netflix is so overrated. its TRASH.

 

[russell_314]

$5/month, with ads, 360p, only a half stream at a time (your choice - right half or left half of each frame) /s

Not impossible. Their “Basic” paid tier is 720P…. Who has a 720P television in 2022 😂

 

[vipergts2207]

Ah yes, the account sharers. That’s it. It couldn’t possibly be the ever increasing price coupled with the deteriorating catalog of quality content to watch.

 

[coolfactor]

Man, people sure are getting cheap with internet-based services these days, yet they'll happily pay $5.00 for a fancy coffee.

 

[TheYayAreaLiving 🎗️]

Cancelled and not going back. The fact they charge extra for 4K content is a joke.

I wonder if Netflix plans on charging for 8K content in the future.

 

[AppleInLVX]

Pfft. The day I pay anyone to show me ads.

 

[coolfactor]

Ah yes, the account sharers. That’s it. It couldn’t possibly be the ever increasing price coupled with the deteriorating catalog of quality content to watch.

Yes, this is likely why they want to introduce ads, because then they get paid for ad impressions regardless of who views the ad, paid customer or not.

 

[TechRunner]

Cancelled when it went to $15.49/month, but just got it back for free as part of our switch to T-Mobile. An ad-supported 480p tier would not have enticed us to return.

 

[SpotOnT]

Not impossible. Their “Basic” paid tier is 720P…. Who has a 720P television in 2022 😂

Don’t a lot of phones/tablets only stream at 720p?

So if you are mainly watching TV on your phone/tablet that could make sense.

 

[Realityck]

I wonder if Netflix plans on charging for 8K content in the future.

There is no 8k content aside from a few you tube examples.

 

[DEMinSoCAL]

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.

This, to me, is the problem. Why Netflix doesn't see that they would pick up more new subscribers and keep more existing if they just gave us 1080p streaming at the $9.99 one screen option is beyond me. It'd help with the "sharing" issue also. People, including me, no longer want to pay >$15 just to watch something in 1080p.

After many, many years, we'll be cancelling Netflix after the 2nd half of Stranger Things is released.

 

[vipergts2207]

Man, people sure are getting cheap with internet-based services these days, yet they'll happily pay $5.00 for a fancy coffee.

Are people cheap or is Netflix’s value proposition awful? They’re the only ones charging based on streaming resolution. Their content is also significantly worse than it used to be.