It’s official: there are ads on Netflix.
Speaking at the Cannes Lions advertising festival on Thursday, Netflix’s co-CEO Ted Sarandos confirmed that the streaming giant’s future will include face-explaining ads. Netflix has long been averse to advertising its subscription service, but after posting disappointing figures last quarter that showed it was losing 200,000 subscribers, the company said it would introduce a cheaper, ad-supported tier for its service in an effort to bring new ones. to bring in customers.
“We’ve left a large customer segment off the table, namely people who say, ‘hey, Netflix is too expensive for me and I don’t mind advertising,'” Sarandos said on Thursday, speaking on the Cannes Lions stage with To wave podcast host Kara Swisher. “We’re adding an ad tier, we’re not adding ads to Netflix as you know it now. We’re adding an ad tier for people who say ‘hey, I want a lower price and I’ll watch ads.’”
Netflix’s presence at Cannes Lions – this is the streamer’s first time attending the global advertising confab – is a clear sign that the company is committed to embracing the ad industry. Sarandos will also be honored this year with the Cannes Lions’ Entertainment Person of the Year award.
It remains to be seen whether a new ad tier will be the solution to Netflix’s growth problems. As the company’s stock price has fallen, there has been growing speculation that the streamer could be the target of a takeover.
Sarandos admitted that a buyout “is always a reality, so we have to think about that with wide eyes,” but insisted that Netflix itself could return to growth. “We have enough scale, profitability and free cash flow to continue growing this business,” he noted.
The Cannes Lions 2022 runs until Friday 24 June.