Netflix will expand its subscription offerings in 2023. Variety reports that the streaming service will offer a cheaper, ad-supported plan next year. The company shared the news with stakeholders during an earnings call earlier this week.
“We’ll likely start in a handful of markets where advertising spend is significant,” the company informed its stakeholders.
“Like most of our new initiatives, our intention is to roll it out, listen and learn, and iterate quickly to improve the offering. So, our advertising business in a few years will likely look quite different than what it looks like on day one.”
The news of Netflix’s developing ad-supported tier follows the streaming platform’s announcement that it had formed a partnership with Microsoft. As of now, Netflix ads will be sold exclusively to the tech giant.
There is no word as to how much the ad-supported tier will cost, but it is expected to be cheaper than the popular subscription tier of $15.49 per month. Additionally, the ad-supported tier may feature fewer shows and films than the more expensive tier. Typically, featuring shows on an ad-supported service is considered a “second-window event” that involves payments to studios and creative talent. Netflix CEO Ted Sarandos is reportedly in discussions with its content providers to resolve any issues that may arise with the introduction of ads.
“The vast majority of what people watch on Netflix we can include in the ad-supported tier today. Some things we’re in conversations with studios on,” Sarandos said, according to Variety.
“We will clear some additional content. Not all of it. I don’t think it’s a material hold-back to the business.”
Netflix has not identified an exact date for the launch of its streaming service, but the platform said it would take place “around the early part of 2023.”