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Netflix’s ad-supported tier will not have all its content, confirms OTT platform

Netflix's ad-supported

Just days after Netflix announced its upcoming ad-supported subscription plans, the OTT platform has now confirmed that its ad-supported tier won’t have all of Netflix’s licensed content. During the company’s most recent earnings call on Tuesday, Netflix co-CEO and Chief Content Officer Ted Sarandos said that the subscription option will not include all of its licensed content at launch.

“The vast majority of what people watch on Netflix, we can include in the ad-supported tier,” said Sarandos. “We will clear some additional content but certainly not all of it but don’t think it’s a material holdback for the business,” he added.

Netflix lost nearly 1 million subscribers globally in the second quarter of 2022, with the US and Canada home to the highest number of cancellations in the quarter, followed by Europe. The platform reportedly lost 200,000 subscribers between January and March.

However, the American streaming platform still turned a $1.44 billion net profit and expects to add a net 1 million subscribers in the next quarter, as per reports. Netflix said that it is expecting its less expensive, ad-supported option to launch in early 2023, starting in “a handful of markets where advertising spend is significant”.

“Our challenge and opportunity are to accelerate our revenue and membership growth… and to better monetize our big audience,” the firm said in its earnings report.

According to reports, Netflix is in talks with studios to amend their deals and be able to make their shows available for streaming alongside ads. Netflix is renegotiating its deals with Warner Bros., Universal, and Sony Pictures Television (producer of Cobra Kai), Wall Street Journal reported. Notedly, Warner Bros. owns the licensing for Netflix’s hit drama “You,” the dark comedy “Russian Doll” belongs to Universal and the shows “The Crown” and “Cobra Kai” are produced by Sony.

“Today, the vast majority of what people watch on Netflix, we can include in the ad-supported tier. There are some things that don’t and we’re in conversations with the studios on, but if we launched the product today, members in the ad tier would have a great experience. We will clear some additional content but certainly not all of it but don’t think it’s a material holdback for the business,” Deadline quoted Sarandos as saying during the earnings call.

For Netflix’s ad-supported tier, the company has joined hands Microsoft to launch a cheaper subscription plan that includes advertisements. The ad-supported subscription will be in addition to the three options already available. Currently, the cheapest plan costs $10 per month in the United States.
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