Netflix co-CEO Sarandos has suggested that the streaming service will likely introduce multiple tiers of ad-supported subscriptions soon.
Just weeks after introducing its first advertisement-supported service, co-Chief Executive of Netflix Ted Sarandos, announced that the streaming giant is likely to launch multiple subscription plans, including ads, soon.
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If you prefer to avoid ads, Netflix already has several packages for you – starting at just $9.99 a month and reaching up to $19.99 per month! As the business expands, Ted Sarandos assures that more plans will also be available in the ad-supported model.
“We have multiple tiers today, so it’s likely we’ll have multiple ad tiers over time, but nothing to talk about yet,” Sarandos said. “And the product itself will evolve, I suspect, pretty dramatically, but slowly, gradually.”
For years, Netflix has shied away from ads on its platform; however, just last month, they revealed a cheaper $6.99 option, including commercials in collaboration with Microsoft. This action is believed to be the result of Netflix’s rising need for alternate revenue streams as their subscriber growth decreases and competition sharpens.
To boost revenue, Sarandos declared on Tuesday that Netflix will focus on tackling password sharing in 2023. It has been reported that over 100 million households, including 30 million within the United States, are using shared passwords. Therefore Netflix needs to take action and ensure secured access across its platform.
Sarandos likened the upcoming crackdown on password sharing to raising prices, which does not make consumers content. Consequently, he noted that Netflix is concentrating on creating solutions for customers to understand and “see the value in Netflix.”
“There are folks who are enjoying Netflix for free today,” Sarandos said. “So, they’re getting a lot of value out of it. I think they’ll be happy to have their own account.”
Netflix offers an incredibly competitively priced “basic with ads” plan that shows subscribers four to five minutes of commercials every hour. Unlike other streaming services, however, this package does not include the ability to download movies or TV series.
With only a select few TV series and films excluded from the ad-supported tier due to licensing conditions, Sarandos declared on Tuesday that approximately 90% is available. Conversations are quickly beginning to bring in the rest.
During The New York Times’ Dealbook conference last week, Netflix co-CEO Reed Hastings confessed that he was initially doubtful of the ad-supported model for the company, and it took him a while to accept its efficacy.
“I was wrong about that. Hulu proved you could do that at scale and offer customers lower prices. We did switch on that,” Hastings said. “I wish we had flipped a few years earlier on that, but we’ll catch up.”
In addition to Hulu, streaming platforms like Warner Bros. Discovery’s HBO Max, NBCUniversal’s Peacock, and Paramount Global’s Paramount+ offer cheaper subscriptions with fewer ads than their competitors. Disney+ also plans on launching a subscription tier that includes advertisements while raising prices for its commercial-free option and other streaming services.
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