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Netflix CEO Ted Sarandos has confirmed adverts will be coming to the streaming service in the near future.
The streaming giant is planning to introduce a brand new lower priced tier for potential customers who may have been turned off by current subscription prices.
In an interview with The Hollywood Reporter, Sarandos explained that the company has ignored a segment of the market so far – those who are willing to pay less by sitting through ads.
"We’ve left a big customer segment off the table, which is people who say: 'Hey, Netflix is too expensive for me and I don’t mind advertising'," he explained.
"We're adding an ad tier; we’re not adding ads to Netflix as you know it today. We’re adding an ad tier for folks who say, 'Hey, I want a lower price and I’ll watch ads'."
The streaming service had previously forecast 2.5 million new paid subscribers in Q1 and now expects to lose an additional 2 million global subscribers in Q2.
Across the UK, both basic and standard Netflix subscription plans increased in price this year by £1 per month to £6.99 and £10.99 respectively, while premium subscriptions went up by £2 to £15.99.
The home to global hits such as Bridgerton, The Crown and Sex Education said the price hike in the UK and Ireland – where the service boasts around 14 million subscribers – was introduced in order to provide the same level and consistency of content for its subscribers.
They added the price hike comes as a response to added competition from rivals such as Amazon Prime Video, Disney+ and Apple TV.
Netflix is not the only streaming service to introduce ads. Amazon Prime began introducing adverts for certain films and TV shows in 2020.
Disney+ previously announced in March a similar ad-based service for the US in 2022 and 2023 for international customers.
The US streaming service Hulu also offers an ad-based tier for customers.
The price of the new tier has not yet been announced.
Netflix is also working on introducing a fee to stop customers from sharing their passwords.
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