Netflix Confirms an Ad Supported Tier is Coming

Netflix, which has laid off 450 employees in two tranches so far, plans to launch an ad-supported tier by the end of the year in order to reduce losses and attract more users to the platform. According to the Hollywood Reporter, Netflix Co-CEO Ted Sarandos confirmed during the Cannes Lions advertising festival that the streaming giant's future will include advertisements.

"We are adding an ad tier. We're not adding ads to Netflix as you know it today. We're adding an ad tier for folks who say, 'Hey, I want a lower price and I'll watch ads,'" Sarandos told 'Sway' podcast host Kara Swisher.

Sarandos confirmed that the streaming service is in discussions with potential ad partners. As the company's stock price has plummeted, speculation that Netflix will be acquired soon has grown. Sarandos admitted that a buyout "is always a possibility, so we have to be open to it."

He insisted, however, that "we have plenty of scale, profitability, and free cash flow to continue to grow this business." Its competitor, Disney Plus, plans to launch a similar ad-based offering by the end of the year, beginning in the United States before expanding globally.