Appearing at the Cannes Lions advertising festival on Thursday, Netflix co-CEO Ted Sarandos confirmed the streaming giant will include tiers with ads in the near future.
The streaming giant has long avoided the inclusion of advertising on its subscription service, but teased a less-expensive ad-supported tier the other month in a bid to bring in new customers.
Sarandos has now explained the reasoning behind the decision:
“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’. We 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.'”
It’s not clear if a new advertising tier will solve the streamer’s growth problems but Sarandos insists Netflix can return to growth on its own: “We have plenty of scale, and profitability and free cash-flow to continue to grow this business.”
Source: THR
