In today's earnings call, Netflix confirmed the reports that have been circulating since last week that it is renegotiating deals to allow the streamer to put content on its cheaper advertising-supported plan, which its arrival on the platform has been moved to early 2023.
“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 conversation with the studios on. But if we launched the product today, the members of the ad tier will have a great experience. And we will clear some additional content […] certainly not all of it but don’t think it’s a material holdback to the business,” said Ted Sarandos, chief executive officer of Netflix.
The stakes are high for the streaming service to deliver a quality lineup of shows for the newer and cheaper tier, as the company reported today a loss of 970,000 subscribers in the second quarter of 2022. Locking some of its premier programming strictly behind the paywall could be a deterrent for people considering the ad-supported version but looking for specific shows.
Netflix didn't say who exactly they are in talks with or what specific titles wouldn’t be on the ad-supported tier. However, the The Wall Street Journal reported that Warner Bros., Universal and Sony Pictures are some of the major entertainment studios that Netflix is trying to amend programming deals with.
Warner Bros. owns the licensing to Netflix’s hit drama “You,” the dark comedy “Russian Doll” belongs to Universal and shows “The Crown” and “Cobra Kai” are produced by Sony.
Netflix hasn’t responded to TechCrunch’s request for comment yet.
Also revealed in the letter to shareholders is that Netflix’s ad-supported tier rollout will be gradual, and the plan will “likely start in a handful of markets where advertising spend is significant.”