John Paul M. Joaquin Tech 07.20.2022 06:Jul AM EDT

Netflix’s Upcoming Ad-Supported Plan Tiers Won’t Let You Stream Every Show It Has

Netflix previously announced that it would soon launch ad-supported subscription tiers to its usual four to provide people who don't mind ads a cheaper alternative to get a subscription.

However, these ad-supported tiers may not be providing the same service as the regular, full-priced ones.

Netflix co-CEO and Chief Content Officer Ted Sarandos revealed during the company's latest earnings call that Netflix's upcoming ad-supported subscription tiers will not include all of its licensed content at launch.

The company is currently talking to local and international studios and distributors to add them to the ad-supported tiers.

Netflix Ad-Supported Subscription Tier Licensing Dilemma

Sarandos admitted in his part of Netflix's latest earnings call that the company will not be offering its full catalog of content from local and international studios and distributors on its ad-supported subscription tiers.

He mentioned that the cut content was due to licensing problems, as these digital content was only provided to Netflix's platform on its regular and full-priced subscription tiers.

On the other hand, Netflix original movies and TV shows, such as TV series "Stranger Things" and Netflix's "Resident Evil" adaptation are guaranteed to be included in the ad-supported subsscription tiers, per 9to5Mac.

However, Sarandos doesn't believe that the missing content in the ad-supported tiers would have a lasting impact on Netflix; he expects that people who subscribe to its ad-supported tiers would have a great experience nonetheless.

"There are some things that don't [get included] and we're in conversation with the studios on, but if we launched tha product today, members in the ad-tier would have a great experience," Sarandos said.

Regardless, Sarandos mentioned that Netflix is already talking to local and internationsl studios and distributors to include their content Netflix's ad-supported tiers.

This effort is evidenced by Netflix talking its deals with these same studios, most notably Warner Bros., Universal, and Sony Pictures Television, to add the content they have to the ad-supported tiers, per the Wall Street Journal.

Netflix Ad-Supported Subscription Tiers Details

Netflix's ad-supported tiers have been the talk of the streaming community for some time as the company took loss after loss this 2022. It first lost 200,000 subscribers during the first quarter of 2022 and one million subscribers in the latest quarter, per Engadget.

As such, it is looking for ways to attract potential subscribers along with increasing the revenue it creates, leading them to the creation of ad-supported tiers and password sharing fees to household members in South America.

Netflix co-CEO Reed Hastings was strongly against the idea of bringing ads and involving advertisers since Netflix launched as a subscription service from the very start. However, he eventually changed his perspective in favor of consumer choice, saying that a move where ad-tolerant consumers would be able to enjoy Netflix at a lower price makes "a lot of sense."

"One way to increase the price spread is advertising on low-end plans," Hastings said in Netflix's latest quarterly investors' interview. "Think of us as quite open to offering even lower prices with advertising as a consumer choice."

To better make its ad-supported tiers a reality, the company teamed up with Microsoft to support its efforts in creating the tiers in question and its "strong privacy protections" for Netflix's subsrcibers was considered by the company as a big boon.