Ads Are Coming to Netflix — Here's Who'll Be Impacted

Netflix Co-CEO Ted Sarandos explained the new strategy in an announcement at the Cannes Lions festival on Thursday

Photo: Netflix (3)

The Netflix experience will be changing soon for many TV and movie fans.

Co-CEO Ted Sarandos confirmed on Thursday that advertisement-supported streaming will be added to the streaming service for subscribers who are willing to watch ads for a lower monthly rate.

"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,'" Sarandos said during a panel at the Cannes Lions festival, reported by The Hollywood Reporter. "We 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.'"

The announcement comes as Netflix lost 200,000 subscribers in its last quarter, as well as amid a crackdown on Netflix users sharing accounts across households.


Sarandos confirmed that subscriptions without advertisements will remain for customers who are willing to pay higher prices (similar to Hulu's model).

Netflix has not yet revealed it new prices, though the current structure is based on video quality.

Liam Daniel/Netflix

On Thursday, Netflix confirmed it had laid off hundreds of employees amid a stock price drop.

"Today we sadly let go of around 300 employees," a Netflix spokesperson told Variety.

"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."

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