It has now been officially confirmed that Netflix will soon be introducing adverts onto its service following an increase in subscription costs.
It comes after the streaming giant reported a huge loss of subscribers over the past year alongside plummeting share prices. The adverts will reportedly be added to a low-price subscription tier and will not be added to regular subscribers who are already paying higher-priced subscriptions.
Around 200,000 subscribers were lost in the company's first quarter while also losing an additional 700,000 subscribers after suspending operations in Russia in response to the Ukraine invasion. It has been speculated that Netflix has lost a chunk of subscribers due to the end of the coronavirus lockdowns around the world.
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Ted Sarandos, Netflix’s co-chief executive confirmed the new strategy in an interview at the Cannes Lions Festival. He said: "We’ve left a big customer segment off the table, which is people who say: ‘Hey, Netflix is too expensive for me and I don’t mind advertising'.
"We’re adding an ad tier for folks who say, ‘Hey, I want a lower price and I’ll watch ads.'"
Netflix announced last week that it was forced to cut around 300 jobs - approximately 4 per cent of its overall workforce. A Netflix spokesperson said: "Today we sadly let go of around 300 employees. While we continue to invest significantly in the business, we made these adjustments so that our costs are growing in line with our slower revenue growth.
"We are so grateful for everything they have done for Netflix and are working hard to support them through this difficult transition."
Netflix is not the only popular streaming platform that will be introducing adverts. Disney Plus has also been said to be exploring introducing its own ad-supported subscription tier.
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