Netflix subscription could get cheaper, but there's a catch

iStock [illustration]

After months of speculation Netflix has finally announced its plans to shift to an ad-supported plan, with the promise of offering cheaper subscriptions.

In an interview at the Cannes Lions advertising festival, Netflix's co-CEO Ted Sarandos confirmed the plan to introduce an ad-supported tier.

“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'."

The company is reportedly in talks with Google and NBCUniversal, among others.

Earlier, several media outlets, including The New York Times had reported that the streaming platform aimed to roll out the advert system by the end of 2022.

The rumours grew stronger in April when Netflix's other co-CEO Reed Hastings also hinted at the plan.

"Those who have followed Netflix know that I’ve been against the complexity of advertising and a big fan of the simplicity of subscription. But as much as I’m a fan of that, I’m a bigger fan of consumer choice," he said. "And allowing consumers who like to have a lower price, and are advertising tolerant, to get what they want makes a lot of sense."

Up until now, the company has never shown ads during or before its TV shows or films.

The firm, however, has had a rough year, losing subscriptions for the first time in a decade and facing criticism for cracking down on password sharing subscribers.

Streaming platforms Hulu and HBO Max already offer similar ad-based plans, Disney+ also planning to join.

More from Business