Amidst speculations around Netflix launching ads on the platform, Ted Sarandos, Co-CEO, Netflix, revealed that the streaming platform only plans to add an ad-tier and has no plans to introduce ads per se.
Ever since its inception, Netflix had been performing exceptionally well until it hit its first 2,00,000-subscriber loss in the first quarter of 2022. As a result, Netflix is now planning to introduce a new ad-tier, under which users will get the option to pick a subscription pack at a lesser cost if they are willing to watch ads.
“We’re adding a tier for folks who say, hey I want lower prices and I'll watch ads,” Sarandos said during the course of an interaction at the centre stage of Cannes Lions 2022.
According to Sarandos, it was a wise decision to not advertise in the early years of Netflix as they wanted to build their product first and were aiming to do better than television or a movie-watching platform.
“Because we wanted to build the business very simply and to grow out fast, advertising felt complicated. But today, I think, what we did was we left a big segment off the table consisting of people who consider Netflix to be too expensive for them and they don't mind advertising,” said Sarandos.
He, however, added, “The reason that Netflix grew was that we wanted to make the experience more integrated and less interrupted.”
Emphasising on why Netflix doesn’t need a hardware device, Sarandos said that there is no need to do so as it already is present in every device that brings the internet to the television and other screens.
Sarandos said, “We will be better off getting Netflix embedded on every device than we would be competing in the device world.”
While Sarandos didn’t reveal the names of any global advertising companies that the streaming platform has planned to partner with for ads, he said, “We want a pretty easy entry to the market as we build and iterate on innovation for Netflix to become a destination for advertisers.”