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Netflix confirms it will launch ad-based subscription tier

Netflix confirms it will launch ad-based subscription tier

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etflix has confirmed that it will release an ad-based subscription, the company’s chief executive has confirmed.

Chief executive Ted Sarandos confirmed that the streaming giant will be releasing a cheaper tier for those willing to watch advertisements during an interview at the Cannes Lions festival.

“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 told the Holleywood Reporter.

“We’re adding an ad tier for folks who say, ‘Hey, I want a lower price and I’ll watch ads.”

It comes after the company cut 300 staff as it continues to battle against a tumbling share price and its first ever decline in subscribers.

“Today we sadly let go of around 300 employees,” a spokesman said earlier this week.

“While we continue to invest significantly in the business, we made these adjustments so that our costs are growing in line with our slower revenue growth.

“We are so grateful for every thing they have done for Netflix and are working hard to support them through this difficult transition.”

In May, the company cut 150 full-time jobs as well as dozens of contractors, and laid off 25 staff the previous month. It had told employees to expect further cuts.

Netflix was seen as an early “pandemic winner” as millions of households signed up to the service during lockdowns.

Growth has slowed dramatically in the last year, however. Subscribers fell by 200,000 in the first three months of 2022, marking the first time in the company’s history that it has lost users.

In March, Netflix announced that subscribers who share accoutns with people outside of their own household will face an additional charge.

It is also facing mounting competition from streaming services launched by Disney, Apple and US cable net works. This has made attracting staff more expensive.

US-listed shares in Netflix have fallen by more than 70 per cent this year despite its attempts to get on top of costs.

The streaming giant is seeking to revive growth by cracking down on users who share passwords across different households and introducing a cheaper version funded by advertising.

Analysts at Bank of America said that they believed Netflix was now at a saturation point in the United States and that squeezed household budgets could mean more people cancelling or selecting cheaper versions of the service.

Variety, which first reported the cuts, said the losses were spread across the business but that the bulk of them would be felt in the US.

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