It’s official: ads are coming to Netflix.
Netflix co-CEO Ted Sarandos, who spoke at the Cannes Lions advertising festival on Thursday, confirmed that the future of the streaming giant will include ads that explain the face. Netflix had long been reluctant to advertise on the subscription service, but after publishing disappointing numbers last quarter, which showed they lost 200,000 subscribers, the company said it would introduce a more affordable ad-supported level for the service in an attempt to bring in new ones. customers.
“We have left a large customer segment off the table, who are people who say, ‘Hey, Netflix is too expensive for me, and I do not mind advertising,’ Sarandos said on Thursday, speaking on the Cannes Lions stage with Sway podcast host Kara Swisher. «We add an ad level; we do not add ads to Netflix as you know it today. We’re adding an ad level for people who say, ‘Hey, I want a lower price, and I’m looking at ads. “
Netflix’s presence in the Cannes Lions – this is the first time the streamer has participated in the global advertising confab – is a clear sign that the company wants to embrace the advertising industry. Sarandos confirmed that the company is in talks with potential advertising sales partners. Sarandos will also be honored this year with the Cannes Lions’ Entertainment Person of the Year award.
It remains to be seen whether a new level of advertising will prove the solution to Netflix’s growth problems. As the company’s share price has fallen, there has been growing speculation that the streamer may be the target of a takeover.
Sarandos admitted that an acquisition “is always a reality, so we need to keep a close eye on it”, but insisted that Netflix could return to growth on its own. “We have plenty of scale and profitability and free cash flow to continue to grow this business,” he noted.
The Netflix boss dismissed the company’s recent stock decline as part of the inevitable ups and downs of the fairly young network streaming business.
“We have gained through experiences where the market disconnects [our] core business and you have to prove that the task still works and will work long term. There is a lot of uncertainty in the world today, and if they get something that rotates the basis of the story, they get nervous. “
Sarandos noted that streaming was still only “about 10 percent of what people do on TV”, Sarandos believed that there was still “a lot of room to grow” for Netflix.
Sarandos again defended his position in support of controversial Netflix comedy specials by Dave Chappelle and Ricky Gervais, saying that Netflix “has always been a fan of the arts” and that the service “programs to people with a real variety of tastes and sensibilities.” notes that what is considered offensive differs from person to person.
“We do not want to make everyone happy, but that’s the beauty of on-demand: you can turn it off. The reason comedy is difficult is that we do not all laugh at the same thing. We all cry at the same time, so drama is a little easier to make, but when it comes to comedy, everything is very different, he said. “Part of the art form is to cross the border, and part of the art form means that you only find where the border is by crossing it sometimes. Supporting expression is very important. “
On Chapelle, who has been sharply criticized by LGBTQ + and the trans community for some of the jokes in his latest Netflix specials, Sarandos doubled down, saying Netflix would fight for the right to show its content “all the way to the Supreme Court.” He noted that Netflix “has never taken [a Chappelle special] down anywhere in the world, “and said that” diversity of thoughts, expressions is super important to defend. It’s good for culture, it’s good for society – not just for the United States, but everywhere. “
However, Sarandos acknowledged that he “should have been more empathetic” with some of his own Netflix employees when they revealed that they were upset about some of the content on the platform. “That’s what I regret, but the decision was very important globally,” he said.
Cannes Lions 2022 runs through Friday 24. June.