Netflix confirms an ad-supported tier is coming (updated)

Google and NBCUniversal might be involved.

Charley Gallay/Getty Images for Netflix

Netflix continues to lock down plans to offer ad-supported service. As The Hollywood Reporter notes, company co-chief Ted Sarandos confirmed to guests at the Cannes Lions festival that Netflix is adding an ad-backed tier with a lower price. He stressed that the option wouldn't bring ads to Netflix "as you know it today" — as with rivals like Peacock, you'll still have the option to avoid marketing altogether. This is just for people who "don't mind advertising," he said.

Sarandos didn't share further details. However, The Wall Street Journal sources recently claimed Google and NBCUniversal are the "top contenders" to help Netflix build the ads-included plan. Either would likely have an exclusive arrangement to serve and (at least in NBCU's case) sell ads. Roku has also had early discussions, according to tipsters. Industry executives talking to Netflix supposedly haven't learned specifics, such as the amount of ads you'll see each hour or whether there will be ad targeting. We've asked Netflix for comment.

The future option is an acknowledgment that Netflix left a large group of customers "off the table," according to Sarandos. The company lost subscribers for the first time in a decade this past quarter, and it's eager to return to growth quickly. An ad-supported plan could help with that goal by drawing in customers put off by Netflix's regular pricing.

Update 6/24 11:25AM ET: A Netflix spokesperson told Engadget that the company was "still in the early days" of developing the ad-based tier, and hadn't nailed down its approach. It's all "speculation" at present, the representative added. You can read the full statement below.

"We are still in the early days of deciding how to launch a lower priced, ad supported option and no decisions have been made. So this is all just speculation at this point."

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