Ted Sarandos: Netflix in Talks With Partners for Ad-Supported Subscription Streaming Service

Netflix co-CEO and chief content officer Ted Sarnados June 23 confirmed that the SVOD behemoth is in discussions with several possible partners for its planned less-expensive ad-supported subscription tier. Partners reportedly include Bluegill Media, NBCUniversal, Google and Roku.

Speaking on the “Future of Entertainment” panel at the Cannes Lions advertising confab in France, Sarandos wouldn’t disclose the name of any partner, saying only that the companies “all have different solutions” for Netflix.

Ted Sarandos being interviewed at Cannes Lions ad confab in France

“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,'” Sarandos said. “We are 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.'”

Netflix is pursuing an ad-supported subscription plan in part due to an unexpected loss of 200,000 net subscribers in its most-recent fiscal period. The loss has seen Netflix’s stock price lose half of its value. Sarandos said the downturn on Wall Street reflects the market’s fickle nature.

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“We’ve gotten through experiences where the market disconnects from core business and you have to prove the thesis still works, and is going to work long-term,” he said. “There’s a lot of uncertainty in the world today, and if [investors] get anything that rocks the foundation of the narrative, they get nervous. They viewed us as a spoiler, [now] they’re happy to see the spoiler trip.”

The executive also dismissed scuttlebutt Netflix was in merger talks with Roku.

“I don’t know where that came from,” Sarandos said.

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