According to Ted Sarandos, Netflix co-CEO, the recent subscription slowdown for the streaming giant can be attributed to inflation, supply chain problems effecting smart TV sales, and the company’s departure from Russia, Bloomberg reported Saturday (July 9).
In an interview with French newspaper Le JDD, he said global inflation means every customer “is asking the question of the value of a subscription in relation to its cost.”
The company has lost 200,000 subscribers in the first quarter and now it’s trying to bring costs under control. That has meant laying off hundreds of employees.
The streaming giant will be introducing a new tier in which customers can pay less but will have ads during shows and movies.
Sarandos said this will let customers buy in who don’t want to pay as much, and it will help adjust the company’s overall business model.
The report notes that Netflix has more than 10 million subscribers in France, for example, and will invest €200 million in French content this year. But Sarandos has criticized an agreement with local cinema guilds which would let them show French films 15 months after theatrical releases. He said it should be “a few weeks” instead.
See also: NBCUniversal, Google Compete to Build Netflix’s Ad Subscription Tier
PYMNTS wrote that the top contenders to work with Netflix on the ad tier are NBCUniversal and Google.
Both companies will likely be looking at an exclusive partnership. The report said NBCUniversal would work with parent company Comcast, which would use its video ad unit FreeWheel to make the ads.
Google, meanwhile, would have its own ad-serving tech and video experience through its work with YouTube.
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