Netflix has confirmed that its ad-supported subscription plans will launch soon, proving that they are not just a figment of our imagination. And when the ad-supported tier launches the following year, it’s possible that some of the titles available on Netflix’s regular plan won’t be available to subscribers. And Netflix co-CEO and Chief Content Officer Ted Sarandos have addressed the same. Keep reading to know more.
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Netflix in talks with Studios over Licensing
According to Deadline, Ted Sarandos admitted during the company’s most recent earnings call that the upcoming subscription option would not initially include all of the company’s licensed content. Unless the company can successfully (and quickly) convince US and international studios and distributors to change the deal they initially agreed to, it will miss shows and movies from both US and international studios and distributors.
Netflix is talking with studios to modify their contracts so that their shows can be streamed alongside advertisements. According to a previous Wall Street Journal report, Netflix is renegotiating its contracts with Universal (the producer of Russian Doll), Warner Bros. (the studio behind You), and Sony Pictures Television (the producer of Cobra Kai). The service will reportedly have to renegotiate the terms for some of its older shows, including Breaking Bad.
Sarandos said during the call that:
“Today, the vast majority of what people watch on Netflix, we can include in the ad-supported. 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.”
During the same call, Netflix lost nearly 1 million subscribers in the second quarter of 2022. It still made a $1.44 billion net profit and expects to add a net of 1 million subscribers in the next quarter. But it’s hoping that some of the measures it’s putting in place will help it grow its user base once more. The ad-supporter tier it will launch with Microsoft early next year could help Netflix grow in markets where ad spending is high.