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Netflix recently confirmed that they are working on an ad-supported tier. This is in response to Netflix announcing that for the first time in 10 years, they have actually lost subscribers, and a cheaper tier is something the company is hoping could draw more customers back in or attract new ones.
Unfortunately, it seems that this cheaper tier isn’t just about customers putting up with ads, it’s going to be about customers putting up with ads while not necessarily being able to watch everything that Netflix has to offer. This was confirmed during Netflix’s recent earnings call where the company’s CEO Ted Sarandos dropped the bombshell.
“The vast majority of what people watch on Netflix we can include in the ad-supported tier. There are some things that don’t, and we’re in conversation with the studios on. But if we launched the product today, the members of the ad tier will have a great experience. And we will clear some additional content, but certainly not all of it but don’t think it’s a material holdback to the business.”
In a way it is understandable. Netflix has to pay movie and television studios a licensing fee to license its content. With customers paying less money for the ad-supported tier, it might not necessarily be enough for Netflix, so limiting the number of shows means potentially reducing licensing costs.
We imagine that Netflix’s own catalog of shows should be available, but third-party licensed content might not. Either way, we should have more details on these limitations once the new tier goes live.
Source: Gadgets 360
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