Netflix’s Ad Tier Comes in Early 2023, But It Won’t Have All Content

Netflix has recently teamed up with Microsoft to launch a new ad-supported tier in 2023, but the new offering won’t provide access to the full Netflix library. If the inclusion of Netflix Originals probably won’t be enough to get millions of people to subscribe, Netflix confirmed that it’s still in negotiations with third-party studios to bring more content to this new ad-supported tier.

“Today, the vast majority of what people watch on Netflix, we can include in the ad-supported tier,” said Ted Sarandos, Netflix’ Co-CEO and Chief Content Officer during the company’s earnings call yesterday (via Deadline). “There’s some things that don’t and we’re in conversations with the studios on, but if we launched the product today, members in the ad-tier would have a great experience. We will clear some additional content but certainly not all of it but don’t think it’s a material holdback for the business.”

Netflix made $7.97 billion of revenue in Q2 2022 (up 9% year over year), even though the company lost around 970,000 subscribers during that period. That number is actually lower than the 2 million subscribers the company had projected last quarter. If the company hopes to gain more subscribers with its cheaper ad tier next year, it won’t be available in all markets at launch.

“We’ll likely start in a handful of markets where advertising spend is significant. Like most of our new initiatives, our intention is to roll it out, listen and learn, and iterate quickly to improve the offering. So, our advertising business in a few years will likely look quite different than what it looks like on day one,” the company explained in its latest earnings reports.

Netflix is also planning to start cracking down on password sharing in 2023. Earlier this week, the company announced that it will start testing a new option allowing subscribers to pay more for the ability to share their accounts outside of their households. The “add a home” feature will be available in Argentina, the Dominican Republic, El Salvador, Guatemala, and Honduras starting next month, and subscribers will be able to pay an extra $2.99 per month to add a new home where their account can be used.

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Conversation 3 comments

  • Chris_Kez

    Premium Member
    20 July, 2022 - 10:59 am

    <p>Netflix Minus</p>

    • dstrauss

      20 July, 2022 - 11:56 am

      <p>Agreed. The slow progress towards cord cutting has only resulted in "each for their own" subscriptions totaling as much, if not more, than cable/satellite options. in fact, it is WORSE because some content is now only available through subscription, even if you have cable (looking at you Paramount, CBS, NBC, etc.)</p>

  • iAlrakis

    Premium Member
    20 July, 2022 - 11:29 am

    <p>Seems only fair.</p>

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