Netflix Co-CEO Confirms Plans for Cheaper Ad-Supported Netflix Tier

Netflix is planning to implement a more affordable ad-supported tier to draw in customers who do not want to pay the $9.99 starting price for an ad-free plan, Netflix co-CEO Ted Sarandos confirmed at the Cannes Lions advertising festival today (via The Hollywood Reporter).

netflix3
The plan is aimed at people who think that Netflix is too expensive and who don't mind ads, with no changes planned for the existing Netflix tiers. "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. "We are 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.'"

Netflix is already in talks with ad-sales partners, and while Sarandos did not provide details on when the ad-supported tier might come out, Netflix has told employees internally that it is aiming for a launch before the end of 2022.

The Basic Netflix plan is priced at $9.99 and it offers 480p streaming, while the Standard plan is priced at $15.49 for 1080p resolution. Netflix's most expensive Premium plan, priced at $19.99 per month, is the sole tier that offers 4K HDR streaming. Netflix is the only streaming service that charges extra for improved streaming quality, and the ad-supported tier would presumably offer streaming quality similar to the Basic plan.

In addition to offering an ad-supported tier, Netflix is planning on cracking down on account sharing. In select countries, Netflix has been testing an extra payment for those who share their Netflix accounts with people outside of their households.

In the first quarter of 2022, Netflix said that it lost subscribers for the first time in 10 years. Revenue growth "slowed considerably," which the company blamed on "a large number of households sharing accounts" and "competition." Netflix estimates that 222 million paying households are sharing with an additional 100 million households that are not being monetized. Netflix has confirmed that it plans to implement "more effective monetization of multi-household sharing" in the future.

Sarandos said that he believes Netflix could return to growth with the changes that are planned. "We have plenty of scale and profitability and free cash flow to continue to grow this business," he said, suggesting that there's "still a lot of room to grow."

Tag: Netflix

Top Rated Comments

kasei Avatar
7 weeks ago
Cancelled and not going back. The fact they charge extra for 4K content is a joke.
Score: 51 Votes (Like | Disagree)
cjgrif Avatar
7 weeks ago
$5/month, with ads, 360p, only a half stream at a time (your choice - right half or left half of each frame) /s
Score: 41 Votes (Like | Disagree)
Spaceboi Scaphandre Avatar
7 weeks ago
Remember when Netflix and other subscription services were cheaper than cable while still not having ads? Those were the days
Score: 33 Votes (Like | Disagree)
vipergts2207 Avatar
7 weeks ago
Ah yes, the account sharers. That’s it. It couldn’t possibly be the ever increasing price coupled with the deteriorating catalog of quality content to watch.
Score: 26 Votes (Like | Disagree)
Dan From Canada Avatar
7 weeks ago
My daughter attending university on the other side of the country used our family account.
We have since cancelled Netflix because of "sharing".
Score: 19 Votes (Like | Disagree)
AppleInLVX Avatar
7 weeks ago
Pfft. The day I pay anyone to show me ads.
Score: 19 Votes (Like | Disagree)

Related Stories

netflix 4

Netflix Partnering With Microsoft for Ad-Supported Streaming Tier

Wednesday July 13, 2022 1:57 pm PDT by
Netflix today announced that it plans to partner up with Microsoft for its planned ad-supported streaming tier, with Microsoft set to handle ad sales. Netflix says that Microsoft will be able to support all of its advertising needs for the new, more affordable streaming option. In April we announced that we will introduce a new lower priced ad-supported subscription plan for consumers, in...
netflix 4

Ad-Supported Netflix Tier Planned for Last Three Months of 2022, Crackdown on Account Sharing Coming

Tuesday May 10, 2022 11:32 am PDT by
A more affordable, ad-supported Netflix plan could be introduced before the end of 2022, Netflix told employees in an internal letter (via The New York Times). Netflix is currently planning to introduce the new ad-supported tier in the final three months of the year, with the plan aimed at attracting new subscribers who find the current pricing unaffordable. The company has been steadily...
netflix2

Netflix Loses Subscribers for the First Time in 10 Years, Blames Account Sharing

Tuesday April 19, 2022 2:15 pm PDT by
Netflix lost subscribers for the first time in more than a decade in Q1 2022, according to subscriber numbers the company said during today's earnings results. Netflix is down more than 200,000 subscribers, and the losses are set to continue. Netflix was expecting to add 2.5 million subscribers in the first quarter of 2022, but did not hit that target. The suspension of its business in...
netflix3

Netflix Lost 1.3 Million U.S. and Canadian Subscribers in Q2 2022

Tuesday July 19, 2022 1:58 pm PDT by
Netflix in the second quarter of 2022 lost 1.3 million subscribers in the United States and Canada, according to new data shared today during the company's earnings call. Netflix had 73.28 million paid memberships during the quarter, down from 74.58 million in the first quarter of 2022. With subscriber additions in some other areas, Netflix in total dropped 970,000 subscribers worldwide....
netflix2

Netflix Testing Password Sharing Plan That Costs $3 Extra in Latin America

Monday July 18, 2022 1:48 pm PDT by
Netflix is working to crack down on account sharing between households, and is now testing an added fee for Netflix users in Latin America who have provided their passwords to people outside of their immediate home. As reported by Bloomberg, Netflix customers who share their passwords in Argentina, El Salvador, Guatemala, Honduras, and the Dominican Republic will need to pay additional money. ...
netflix games launch

Netflix Games Engaging Less Than 1 Percent of Subscribers

Monday August 8, 2022 3:34 am PDT by
Netflix's mobile gaming platform has been engaging less than 1 percent of Netflix subscribers since its launch last November, according to new data from app analytics company Apptopia (via CNBC.). Included with every Netflix subscription, Netflix Games allows users to play a handful of games on their mobile devices. Games are released as individual apps on the iOS App Store, while the full...
netflix account sharing

Netflix Testing Add-On Payment for People Who Share Accounts Outside Their Households

Wednesday March 16, 2022 11:23 am PDT by
Netflix today said that it may implement an extra payment for those who share their Netflix accounts with people outside of their households, a practice that is common with the streaming service. According to Netflix, sharing accounts between households impacts its ability to "invest in great new TV and films" for its members, and so it has been exploring ways to permit users to share...
netflix games launch

New Netflix Games Feature Now Available on iOS Devices

Tuesday November 9, 2021 10:23 am PST by
Netflix today announced the launch of Netflix Games for iOS, one week after rolling out the feature on Android devices. Netflix Games, included with a Netflix subscription, allows users to play a handful of games on their mobile devices. Available gaming titles include "Stranger Things: 1984," "Stranger Things 3: The Game," "Shooting Hoops," "Card Blast," and "Teeter Up." Accessing games...

Popular Stories

iPhone 14 Dummies 1 Feature

Everything Rumored for Apple's September Event: iPhone 14, Apple Watch Pro and More

Friday August 12, 2022 2:34 pm PDT by
There's just about a month to go until Apple holds its annual September event focusing on new iPhone and Apple Watch models. We thought we'd take a quick look at everything that's rumored for Apple's September event to give MacRumors readers a rundown on what to expect when the first fall event rolls around. iPhone 14 The iPhone 14 can probably be described more as an "iPhone 13S" because...
iPhone 14 Pro Purple Rear Flat MacRumors Exclusive

iPhone 14 Pro Predicted to Start With Increased 256GB Storage Alongside Rumored Price Increase

Wednesday August 10, 2022 11:14 am PDT by
Earlier today, analyst Ming-Chi Kuo claimed iPhone 14 Pro models will be more expensive than iPhone 13 Pro models. Kuo did not reveal exact pricing, but he said that the average selling price of all four iPhone 14 models will increase by about 15% overall. While higher prices would be disappointing for customers, it is possible the iPhone 14 Pro and iPhone 14 Pro Max will offer increased...
iPhone 14 Pro Lineup Feature Silver

Kuo: Apple to Increase Prices of iPhone 14 Pro Models

Wednesday August 10, 2022 8:22 am PDT by
Apple plans to increase the prices of iPhone 14 Pro models compared to iPhone 13 Pro models, according to analyst Ming-Chi Kuo. Kuo did not reveal exact pricing for the iPhone 14 Pro models. However, in a tweet today, he estimated that the average selling price of the iPhone 14 lineup as a whole will increase by about 15% compared to the iPhone 13 lineup. In the United States, the iPhone...
iPhone 14 Pro Purple Front and Back MacRumors Exclusive feature

iPhone 14 Is Just a Few Weeks Away: Three Tips to Prepare for the New iPhone

Wednesday August 10, 2022 4:08 am PDT by
The launch of the new iPhone 14 is just a few weeks away, meaning millions of iPhone customers will soon upgrade their existing iPhone or perhaps get an iPhone for the first time. Exclusive MacRumors iPhone 14 Pro renders by graphic designer Ian Zelbo Whether upgrading from an older model or this is your first iPhone, we've rounded up a few tips to help you prepare for the next flagship...
z fold 4 1

Hands-On With Samsung's Latest Foldable Smartphones, the Galaxy Z Fold and Z Flip

Friday August 12, 2022 12:46 pm PDT by
Samsung this week launched its fourth-generation foldable devices, the $1,000 Galaxy Z Flip and the $1,800 Galaxy Z Fold. Though there's no sign of a comparable Apple foldable device on the horizon, rumors suggest prototypes are in the works, so we thought we'd take a look at Samsung's newest smartphones to see what Apple needs to measure up to when a foldable iPhone does come out. Subscribe ...
iPhone 14 Pro Purple Rear Flat MacRumors Exclusive

iPhone 14 Pro: Analyst Believes Storage Will Continue to Start at 128GB Despite Rumored Price Increase

Friday August 12, 2022 7:04 am PDT by
It wouldn't be the month before an iPhone launch without a few back-and-forth rumors, with the latest debate concerning iPhone 14 Pro storage. iPhone 14 Pro render by Ian Zelbo While research firm TrendForce forecasted that iPhone 14 Pro models could start with an increased 256GB of storage, Haitong International analyst Jeff Pu today forecasted that the upcoming Pro models will continue to...