Do you like ads? It's not a real question. No one likes ads. If you can stomach them, though, an ad-supported subscription plan for Netflix could be good if it's significantly cheaper than the regular plans.
But unfortunately, the inclusion of ads won't be the only bad thing about this plan.
Talking on Netflix's earnings call on Tuesday (via Deadline), Netflix Co-CEO and Chief Content Officer Ted Sarandos said that the upcoming ad-supported tier, which the company will launch with the help of Microsoft, won't have all of Netflix's licensed content.
"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 said.
While Netflix's original shows, such as Stranger Things, will certainly get in the mix, this means that some of the content from other studios and distributors won't make the cut. We'll have to wait until it launches to see what "vast majority of what people watch" actually means, though.
After years of saying ads are bad, Netflix started talking about adding an ad-supported tier this April. In June, the company accelerated the plans to include the ad tier as early as this fall (this has now moved to early 2023). Meanwhile, Netflix has increased its pricing, and started clamping down on account sharing.
Netflix lost 200,000 subscribers in the first quarter of 2022, and an additional 970,000 subscribers in the second quarter of the year, though this is better than the two million loss the company predicted. The ad-supported tier is one of the ways for Netflix to stop the bleeding, though it remains to be seen how compelling the final product will be.
