Netflix confirms its plans to launch a cheaper plan with ads

Ever since the rumors emerged that Netflix was contemplating a cheaper, ad-supported tier for its video-streaming service, we’ve been holding our breath, waiting for the details to fully emerge. And while that still hasn’t happened, we’re now one step closer: Ted Sarandos, Netflix’s Co-CEO, confirmed that what was once an idea will soon be a reality.

“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,’” Sarandos told a crowd of attendees at the Cannes Lions advertising festival on June 23, according to The Hollywood Reporter.

Sarandos’ comments come not long after his co-CEO, Reed Hastings, made a similar statement when he spoke to investors in April. Hastings said “allowing consumers who would like to have a lower price and are advertising-tolerant to get what they want makes a lot of sense.” At that time, Hastings wasn’t clear on what such a plan would look like, and whether or not it would impact the rest of the service’s tiers. Now we know that it will be an additional, cheaper plan, and not a modification of one of the existing plans.

But the crucial details are still frustratingly absent. How much will the new ad-supported tier cost? Just how many ads will people be required to sit through? Will the ads only run between episodes, or will they interrupt longer shows and movies? And when will this new tier launch?

For all of these questions, only the topic of timing has a potential answer. And that could be sometime near the end of 2022, according to a previous report from the New York Times, which cited an internal presentation given to Netflix employees. That timing could certainly materialize as suggested. Netflix recently revealed that it lost 200,000 paying subscribers in the second quarter of 2022, which must be putting the company under considerable pressure to find ways to reverse this trend. But so far, Netflix itself has remained quiet on when it plans to let people sign up for what will be the least expensive way to watch the streaming giant’s content.

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