Netflix execs say ad-supported subscriptions will lack some content

Cal Jeffrey

Posts: 3,578   +1,075
Staff member
In context: Streaming networks are finding themselves in a position to offer cheaper subscriptions by creating ad-supported tiers. For many, such as Disney, this is a trivial matter since it owns everything it broadcasts. However, it's not such a simple matter for streamers, like Netflix, that license a lot of content.

In a Q2 2022 earnings interview, Netflix executives hinted that their plans for an ad-supported subscription would not include the entire VOD library when it launches later this year. The problem stems from the company lacking the licensing to move some content to the cheaper tier.

However, Netflix co-CEO Ted Sarandos said that if the company launched the new tier today, it would still have enough content to make for a satisfying experience for subscribers.

"Today, the vast majority of what people watch on Netflix, we can include in the ad-supported tier," Sarandos said. "We don't think it's a material holdback to the business."

Netflix CFO Spencer Neumann added, "We can launch today without any additional content clearance rights."

Sarandos indicated that the streaming giant is currently negotiating agreements with various studios to obtain additional content licensing. He said he is confident they will clear more content before the product launches, but "certainly not all of it."

The execs stopped short of mentioning specific programming, but it clearly sounds like it pertains to shows and movies outside the Netflix production umbrella. So customers will likely see all their Netflix Originals, such as Stranger Things, Bridgerton, and Hustle on the cheaper rate. According to financial chief Neumann, none of the missing content is a "must-have."

The Netflix CFO is probably thankful that he appended remarks earlier this year about Nextlix not taking the ad-supported path with a "never say never." In March, Neumann expressed that the company had no interest in following Disney's lead regarding ad support because "it didn't make sense" for the company. It seems to be making sense now, though.

In May, analytics firm Antenna revealed that Netflix lost more than 3.6 million subscribers in Q1 2022. Those losses were more than a million over the previous five quarters combined. That news was accompanied by two rounds of layoffs that eliminated 175 jobs. In Q2, attrition dropped to about 970,000 cancelations, showing that subscriber bleed might be tapering off.

In July, the streaming giant initiated a password-sharing crackdown, asking subscribers in several countries to pay extra if their accounts were used away from their primary residence for more than two weeks. The cost-recovering effort occurred right after the ad-based tier's announcement, indicating that Netflix is getting hit hard in the pocketbook.

Netflix's financial concerns partially stem from increased competition in the sector as cable companies and studios continue to push to make streaming the new cable, much to the dismay of cord-cutters everywhere. However, the streamer has also been producing much more "woke" programming lately. It has become lax with creating non-divisive entertaining content — a failing that is probably driving a significant portion of its cancellations.

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terzaerian

Posts: 1,488   +2,200
Bye Felisha, your money is not needed ..
p.php

Man that's a lot of Felishas. Could it be you're actually the minority?
 

emmzo

Posts: 674   +917
Could they have considered making premium subs, which is what everyone has, because the lower tiers are absolute shait, cheaper, even by a little, then more people would have come, so, more overall profit? No, never, just new ways to squeeze dry any existing and potential customers. I'm still anxious to see how they'll implement IP rules, especially to people like me who have dynamic IPs.
 

toooooot

Posts: 1,632   +833
p.php

Man that's a lot of Felishas. Could it be you're actually the minority?
:D
:-D

I canceled my subscription long time ago, dont remember when exactly.
And in all this time I was somewhat interested in just a couple of shows.
Netflix quality dropped drastically, and it keeps going down. They keep pooping shitty shows like that new resident evil show. They are hoping that the amount will somehow cover for lack of decent shows.
 

terzaerian

Posts: 1,488   +2,200
Nope .. only 15% of all republikkkans are self-canceling. The rest is just the loss of revenue from the pandemic ending .. to which .. your welcome.
Yeah, huge thanks for doubling the price of gas, energy, and basic necessities and destroying the rest of the economy and supply chain in the process. You're a real hero.
 

Theinsanegamer

Posts: 3,530   +5,966
There's been a change in the wind and Netflix is just the beginning.

Twice the pride double the fall. Being a titan of industry does not immunize you from falling apart, especially in the entertainment industry where many a company has met a grisly end.
I just gotta love the anti-Netflix clowns. Netflix may have lost a few subscribers from the far beyond any other streaming service subscriber base, but they are far from going under.
Sears. Montgomery ward. Packard. Lionel. Atari. Kodak. Commodore. Blockbuster.

All titans of their respective fields, all would get crushed by market changes.
Bye Felisha, your money is not needed ..
Give it a few years and you will be the felisha that is getting shown the door for not being woke enough. These types of businesses will continue to eat their own, scaring away both customers and creators, until eventually they are a scrawny husk of their former selves, and nobody knows why they are still around.

RoosterTeeth is a great example of how this happens. Once the rot sets in it will consume the host unless it is cut out with extreme prejudice. Netflix's customer base is not happy with their current trajectory, which is why they went from adding 7-10 million subs per month to LOSING almost a million a month. Netflix is not sustainable even now, losing the equivalent of 10 million subs a month isnt going to help that.
 

Watzupken

Posts: 671   +544
From what I have been hearing about the things that Netflix is planning to do to increase subscription, I actually feel it will backfire on them badly. The truth is that people have subscribed to Netflix over the past 2.5 years because they tend to get stuck at home due to lock downs and fear of pandemic. So as more people go outdoor, they will naturally stop watching and makes sense to unsubscribe. After all, we don't get new contents that frequently. By making it more expensive, introducing more limiting tiers, etc, they are basically annoying their base users that tend to keep their subscription. So let's see what happens after they start rocking the boat.
 

James Ryan

Posts: 22   +38
Yeah, huge thanks for doubling the price of gas, energy, and basic necessities and destroying the rest of the economy and supply chain in the process. You're a real hero.
Most of that would have happened under either party.
If you still think one side is vastly better than the other you're delusional.
You just prefer the smell of one S#it more than the other.
 

AlaskaGuy

Posts: 439   +339
Most of that would have happened under either party.
If you still think one side is vastly better than the other you're delusional.
You just prefer the smell of one S#it more than the other.
Trump had the US economy rolling ... or course he didn't shut down oil & gas production in the US like the current administration.
 

ZedRM

Posts: 1,172   +812
Wait, users have to PAY to watch ads AND there will be less content? Eff that and no thank you Netflix...

Oh and for the record;
However, the streamer has also been producing much more "woke" programming lately.
THIS is what is really driving subscription cancellations. A lot of people don't want to see that ultra-liberal nonsense!