As Netflix continues to lose subscribers, the company has confirmed that its planned ad-supported subscription tier won’t feature all of the content available on the platform.
Per Deadline, Netflix co-CEO and Chief Content Officer Ted Sarandos confirmed on a recent earnings call that the content difference, attributing it to licensing issues:
“Today, the vast majority of what people watch on Netflix, we can include in the ad-supported tier. 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.”
While a bit of a bummer that some content won’t make it to the cheaper ad tier, it seems like all the Netflix original content will be available. I’d argue that’s the more important thing for the ad tier since Netflix is the only place to get Netflix originals — if that’s what you’re after, then the ad tier may be perfect.
Netflix has been thinking about a lower-cost, ad-supported tier for a while now (if you believe the rumours). Sarandos confirmed it was something the company was looking at back in June, noting the goal was to offer a cheaper subscription for customers who were willing to watch ads and pay less. Later, Netflix confirmed it was working with Microsoft to handle the advertising technology.
All this comes as Netflix continues to lose subscribers. The company reported a loss of 1.3 million between the U.S. and Canada, and in the previous quarter, it lost 200,000 subscribers. The losses come after Netflix repeatedly increased subscription prices in the U.S. and Canada.
In other Netflix news, the company is continuing tests on ways to crack down on password-sharing and get customers to pay for it. The most recent test added a charge for additional households in several countries, including Argentina and Honduras.