For years, subscribers and non-subscribers asked Netflix for a more affordable subscription plan, but the company hadn't budged. That was until the rumors that an ad-supported tier was in the works appeared in mid-2022.

And, as it turns out, the rumors were true—Netflix's CEO has confirmed that an ad-supported tier is indeed coming. But what does this mean for current subscribers?

Netflix Confirms It’s Adding an Ad-Supported Tier

netflix opening screen on laptop

Netflix CEO Ted Sarandos has confirmed that the streaming service will indeed add a cheaper, ad-supported tier. As reported by The Hollywood Reporter, Sarandos shared the information at the Cannes Lions advertising festival on June 23, 2022, thereby putting an end to the speculation.

Sarandos stated that his company had left out a market segment that doesn't mind watching ads and is willing to pay less for a subscription that includes them. As explained by Sarandos:

We’ve left a big customer segment off the table, which is people who say: ‘Hey, Netflix is too expensive for me and I don’t mind advertising.' We 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.'

Netflix was against the idea for years, but it seems to have come around after it had a rough start in 2022. For instance, Netflix lost 200,000 subscribers in Q1 of 2022, and its revenue growth slowed significantly in the same period. This could've been the straw that broke the camel's back, forcing the company to give in to its subscribers' demands for a cheaper plan.

After publishing its disappointing Q1 results in 2022, it was reported that Netflix is considering live streaming some of its content in an effort to bring back lost subscribers. Given that Netflix is also cracking down on password sharing, not only would an ad-supported tier help the service regain its subscribers, it could even attract new ones.

Netflix hasn't revealed when it will launch its ad-supported tier, but the New York Times reports that it could be available by the end of 2022.

What an Ad-Supported Tier Means for Netflix Users

Man watching Netflix on Tablet

If you're still a Netflix subscriber, chances are you have considered canceling your subscription at some point. And since Netflix increased its prices in early 2022, you may even fall in the category of subscribers that no longer see value in keeping a relationship with the streaming service.

But since Netflix is adding a cheaper subscription plan, that could change your mind and prompt you to downgrade instead—that is, if you don't mind being interrupted by ads. There's a lot of talk about how a Netflix ad-supported tier would work, but we can guess based on what other platforms offer.

Other streaming services that offer ad-supported plans include HBO Max, Hulu, Paramount+, Discovery+, and Peacock. Their ad-supported plans range from $5 to $10, roughly half the price of their ad-free plans. Since Netflix's cheapest ad-free plan costs $10/month, you're looking at paying anywhere between $5 and $7 for an ad-supported tier. This plan would likely show you between 8 and 23 ads per hour.

A Silver Lining for Netflix Subscribers

The news of an upcoming ad-supported tier gives hope to Netflix subscribers that may be on the fence about keeping their subscriptions. The option of a cheaper plan is also a silver lining for subscribers looking to join other streaming services that already offer an ad-supported tier at competitive price points.

In addition to saving it from losing more subscribers in the future, Netflix's plan to introduce a cheaper tier could even attract more subscribers going forward, especially since it has made it harder for people to share passwords.