Ads are officially coming to Netflix.
Co-CEO of the streaming platform Ted Sarandos confirmed at the Cannes Lions Advertising Festival on Thursday (June 23) that they will be looking to introduce an ad-supported version of the service in the future.
Historically, Netflix has always been opposed to introducing ads to its platform. However, recent figures - which show that the streaming giant hemorrhaged 200,000 subscribers last quarter - seem to have prompted company bosses to reconsider. Their very presence at Cannes Lions (which they've never attended before) suggests Netflix has had a change of heart when it comes to advertising.
Speaking to Sway podcast host Kara Swisher, Sarandos outlined how Netflix plans to bring in ads - but only for users who are okay with viewing them.
"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, per The Hollywood Reporter.
The co-CEO - who is being honored with this year's Cannes Lions’ Entertainment Person of the Year award - went on to explain how they'd be bringing in a cheaper subscription level that included ads.
"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,'" he told Swisher.
Sarandos went on to confirm that they are in talks with potential ad-sales partners, meaning that advertisements on Netflix could be even closer than people think.
Later in the interview, Sarandos spoke more about Netflix's troubles, notably the drop in their stock prices. Despite the difficulties, he was optimistic that the company could still bounce back.
"We’ve gotten through experiences where the market disconnects from [our] core business and you have to prove the thesis still works, and is going to work long-term. There’s a lot of uncertainty in the world today, and if they get anything that rocks the foundation of the narrative, they get nervous," he said, before arguing that there was still "a lot of room to grow" for the company.
