Netflix is planning to introduce a cheaper subscription tier that includes advertisements, but now we're learning that the ad-supported version of Netflix may not include all of the streaming service's content.
As part of Netflix's Q2 2022 earnings interview, Netflix co-CEO and Chief Content Officer Ted Sarandos was asked about the licensing issues that arise when it comes to monetizing content through ads. Sarandos said as of now, not every show would be included in the new tier, but that Netflix is working to add more.
"Today, the vast majority of what people watch on Netflix, we could include in the ad supported tier today," Sarandos said. "There are some things that [wouldn't be included], that we are in conversation with the studios on, but if we launched the product today the members in the ad tier would have a great experience. And we will clear some additional content, but certainly not all of it."
Shows created in-house at Netflix like Stranger Things aren't the ones in question here. According to a report from The Wall Street Journal last week, Netflix is in talks with Warner Bros., Universal, and Sony Pictures Television to secure shows like You, Russian Doll, The Crown, and Cobra Kai for the ad-supported tier. This will also impact old shows that live on Netflix, like Sony's Breaking Bad and Paramount's NCIS. According to the report, studios are seeking a higher cut of the revenue to allow Netflix to add their content to the new ad-supported platform.
Earlier today, we learned Netflix plans to add a new price model to the service early next year. Netflix said the rollout will be gradual, beginning in markets where advertising spending is significant. The company has not yet revealed how much this new tier will cost.
The ad-supported subscription model was first revealed back in April during Netflix's Q1 2022 earnings interview. The plan will offer a lower entry price in exchange for viewing advertisements. Competing services like Peacock already have tiers that fit this category.
Elsewhere in its earnings, Netflix revealed it lost almost one million subscribers over the last quarter, amidst an increased crackdown on password sharing. The company also announced its acquisition of animation studio Animal Logic.
Logan Plant is a freelance writer for IGN. You can find him on Twitter @LoganJPlant.