Netflix’s first subscription plan with ads won’t be its last, according to co-CEO Ted Sarandos. Just one month after the formerly commercial-free streaming service launched a cheaper, ad-supported option for $6.99 per month, Netflix says it’s likely to offer multiple ad plans to its customers. (Not all titles are available under the ad plan, which has between four-to-five minutes of unskippable advertisements per hour.) Netflix’s current plans include Basic with ads, and three ad-free tiers: Basic ($9.99/month), Standard ($15.49/month), and Premium ($19.99/month). But while delivering a keynote at the UBS Global Technology, Media & Telecom Conference on Tuesday, Sarandos said Netflix subscribers would eventually have more ad-supported options to choose from:
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“We have multiple tiers today, so it’s likely we’ll have multiple ad tiers over time, but nothing to talk about yet,” Sarandos said (via CNBC). “And the product itself will evolve, I suspect, pretty dramatically, but slowly, gradually.”
Sarandos also acknowledged the streamer — which broke rating records with recent hits Stranger Things 4, Squid Games, Dahmer – Monster: The Jeffrey Dahmer Story, and Wednesday — “went too long ignoring” the issue of discouraged password sharing without an additional fee.
Since launching the Netflix with ads plan in partnership with Microsoft, the company also rolled out the Managing Access and Devices feature, enabling customers to log out of specific devices. As Netflix does more to address password-sharing between accounts outside of a subscriber’s household, it will also launch a profile transfer feature for “borrowers” beginning in 2023.
The aim is to have consumers “see the value in Netflix,” Sarandos said. “There are folks who are enjoying Netflix, literally for free today. So, they’re getting a lot of value out of it. I think they’ll be happy to have their own account.”
In October, when asked about the potential of subscribers downgrading from the more expensive Standard or Premium plans to the cheaper ad-free tier, Chief Product Officer Greg Peters said Netflix typically doesn’t see users switch plans. During a third-quarter earnings call, Peters noted any potential loss of subscriber revenue could be made up with earnings from advertisers.
“We’re not trying to steer our members to one plan or another,” Peters explained. “We’re trying to take a pro-consumer approach and let them find and land with the plan that’s right for them.”
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