Netflix will air commercials, it has been confirmed

Ads are coming to Netflix, according to Netflix Co-CEO Ted Sarandos, who verified the rumour.

As reported by the Hollywood Reporter, Netflix CEO Reed Hastings confirmed earlier rumours that Netflix will be launching a lower-priced, ad-supported subscription option.

In 2022, Netflix has made significant progress in this area. Back in March, when questioned about the possibility of an ad-supported tier, business CFO Spencer Neumann would only state that he could “never say never” before quickly adding that it “not anything in [the brand’s] plans right now.” When asked about the notion.

On April 20, Reed Hastings, Netflix’s other Co-CEO, indicated that the streaming service was then “very open” to the prospect of an ad-supported tier and may be a viable option for the service “over the course of the next year or so.”

On stage at Cannes Lions, a five-day industry extravaganza now taking place, Sarandos said he aimed to attract a “large client group.” The tier, he said, would be a stand-alone service, with no ads showing up on the Netflix accounts of current users.

Sarandos responded to a question regarding advertising on the site by saying: “Many individuals who say, “hey, Netflix is too costly for me and I don’t mind advertising,” have been left out of the running. We’re not bringing advertisements to Netflix in the traditional sense; rather, we’re adding an ad-tier to the service. Advertisements will be available for those who say “hey, I want a reduced price and I’m willing to watch ads.”

According to prior rumours, Netflix will begin serving advertisements before the end of the year in 2022.

“…plenty of size, and profitability and free cash-flow to continue to expand this business,” Sarandos said of Netflix’s potential.

In order to re-enter the market and entice new customers, Netflix is increasing the price of its monthly memberships by a factor of two.

When it was revealed in April that it had lost 200,000 members since January 1, 2022, and its market worth had dropped by more than $70 billion because of this, it sought to shore up income.

For a subscription service, an ad-supported, lower-priced tier is nothing new.

There are currently a number of services that provide it, including Hulu, HBO MAX, Paramount PLUS, and Peacock, and Disney PLUS will be adding it later this year.

Do you think adding a new tier is a good idea?

To avoid a tidal wave of displeasure among its current customers, Netflix has to implement this strategy. The notion that Stranger Things users who pay for the streaming service’s basic package would be okay with ads popping up in the middle of an episode is absurd.

It’s likely that Netflix officials haven’t yet determined how much the ad-supported membership tier will cost, how frequently ads will show, or the length of commercial breaks, which is why Sarandos has simply stated that there will be ads.

Netflix has reportedly met with Google, Roku, and Universal parent firm Comcast in an attempt to sketch out their intentions to incorporate advertising on the site, according to allegations that have surfaced in the last week.

According to the numbers, Netflix has more than 220 million users globally and a wealth of consumer data that can be used to tailor advertisements to certain demographics, locations, and interests. No, I’m not talking about the movies you can find on Netflix. Ads promoting vacations in the sun are likely to appear. In theory, it could be that precise.

Netflix is in need of a major overhaul. The rising cost of living has made individuals more selective about their streaming services, and the price hike in March will not have helped.

If ads save Netflix from having to cancel so many series and lay off so many employees, then it was a wise choice. All we have to do now is find out how much it will cost and how many commercials we’ll have to go through…