Ted Sarandos explains why Netflix will add a new tier of ad-supported streaming service

This is official: Ads are coming to Netflix.

Netflix CEO Ted Sarandos confirmed in a speech at the Cannes Lions Advertising Festival on Thursday that the streaming giant’s future includes ads and an explanatory visual. Netflix hasn’t advertised its subscription service in a long time, but after reporting disappointing numbers last quarter showing it had lost 200,000 subscribers, the company said it would introduce its cheaper ad service to attract new customers. .

“We leave a large segment of consumers off the table. These are people who say, ‘Look, Netflix is ​​too expensive for me and I don’t care about advertising,’” Sarandos said onstage at Cannes Lions on Thursday. . Oscillation Podcast presenter Kara Swisher. “We are adding ads, we are not adding ads on Netflix as you know it today. We’ve added an ad layer for those who say, “Look, I want a low price and I’m seeing ads.”

Netflix’s presence at Cannes Lions – this is the first time Streamer has participated in a global advertising campaign – is a clear sign that the company is trying to get involved in the advertising industry. Sarandos will also receive the Cannes Lions Entertainment Man of the Year award this year.

Whether the new level of advertising will be a solution to Netflix’s growth problems remains to be seen. Due to the company’s share price plummeting, there has been growing speculation that the streamer may be the target owner.

Sarandos acknowledged that the acquisition “has always been a reality, so we have to be vigilant” but insisted that Netflix can grow independently again. “We have a lot of scale, profitability and free cash flow to continue to grow in this business,” he said.

The 2022 Skin Lions will take place from Friday to June 24th.