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Netflix ad-funded tier will omit content as 1 million subscribers lost

The much-vaunted Netflix ad-funded tier won’t grant access to all of the company’s content library, it’s been revealed, as it posted another massive subscriber loss.

Company co-CEO Ted Sarandos admitted during the company’s Q2 2022 earnings call that while “the vast majority of what people watch on Netflix, we can include in the ad-supported tier”, there are other items of content “that we’re in conversation about with the studios on”.

Sarandos went on to clarify that “We will clear some additional content, but certainly not all of it”.

This doesn’t relate to Netflix’s own self-made Original content, which it naturally has full rights over. Rather, this relates to the TV shows and movie content that Netflix licenses from other studios and production companies.

Sarandos insisted that “if we launched the product today, members in the ad-tier would have a great experience.”

The company will be sincerely hoping that its forthcoming ad-subsidised tier turns out to be compelling for potential customers, as it also just admitted to losing 1 million worldwide subscribers over the past quarter. This followed on from a first quarter in which the company lost 200,000 subscribers – its first such loss in over a decade.

It’s not all bad news for Netflix, with revenue up 9 percent year on year, and US viewing time up to a record 7.7 percent in June. That should bode well for the company’s future ad income.

Netflix announced last week that it was partnering with Microsoft on this long-awaited ad-funded tier. More recently, it emerged that the company was testing a new way to claw back revenue by charging customers for password sharing.

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