Netflix Aims to Launch a Ad-Supported Plan

Netflix said on Tuesday that it plans to launch a lower-cost, ad-supported plan in early 2023. However, don't expect it to have the entire Netflix catalogue when it launches. Netflix has hundreds of original shows and movies available on its platform, many of which it produces in-house, such as the megahit "Stranger Things."

However, the company must renegotiate licencing agreements with other studios that have produced some of its original content, as well as those from which it has acquired streaming rights for non-original content, because previous agreements did not include agreements regarding ad placement.

This will be a critical step in the development of an ad-based tier, which Netflix has previously opposed. However, in light of rising subscriber losses, the company is looking for new ways to boost growth.

"The vast majority of what people watch on Netflix we can include in the ad-supported tier today," co-CEO Ted Sarandos said during the company's Q2 earnings call on Tuesday. "There's some things that don't that we're in conversations with the studios on. But if we launched the product today, the members in the ad tier would have a great experience."

He further stated, "We will clear some additional content, but certainly not all of it. But we don't think it's a material holdback to the business."