Netflix Ads Are Officially Coming - Here's What It Really Means

Netflix has been having a rough time, lately. A record loss of over 200,000 subscribers at the start of 2022, the loss of several Marvel series to Disney+, layoffs — and there's still roughly half a year left to go. Naturally, the once-dominant streaming service is looking to halt the decline of its profits and get its business back on the right track. Sure the clamp-down on password sharing wasn't received very well — particularly since it previously stated that password sharing was a good thing back in 2017.

So what's the next big plan to fix Netflix? It's not backing down on discouraging password sharing, reigning in the budget for greenlighting big-budget original shows. It isn't having second thoughts about its real-world "Squid Game" game show idea. Instead, according to co-CEO Ted Sarandos speaking at the Cannes Lions advertising festival, Netflix will be releasing an ad-supported subscription tier to its service with a price that's more affordable than its standard tiers (which will remain ad-free).

What does Netflix with ads mean for me?

Sarandos explained the thinking behind the decision, saying "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.'"

Given the wording — that it will be a separate subscription membership option — you probably don't have to worry about seeing any ads during your next binge session. Unless Netflix decides it needs to try and eke a bit more out of its existing subscription plans, the only way you'll have your streams interrupted by corporate messaging is if you opt-in. Netflix still makes its money, but it's delivered by an ad service rather than you — and you won't have to pay as much per month as you otherwise would. 

The price of this future ad-based plan remains to be seen. Sarandos also acknowledged that a buyout of the company (likely resulting in a takeover) could be possible, but still believes Netflix can dig itself out of the hole in which it currently resides. If Netflix is acquired, all talk of an ad-supported subscription tier could go out the window — but we'll cross that bridge when we get there.