Netflix's ad tier might not be such a good deal after all

Netflix’s yet-to-be-launched ad-supported tier won’t offer the company’s full library of content at launch according to Netflix executives who discussed the plan during the company’s Q2 earnings call (PDF). Specifically, Netflix’s original content might make up the bulk of the tier’s options; which, depending on how you feel about a show like Snowflake Mountain, could be a deal-breaker.

This move could be seen as a direct response to studios looking to renegotiate their deals with Netflix now that they know the streaming service and Microsoft could try and place ads on top of their shows, Protocol writes.

“Today, the vast majority of what people watch on Netflix, we can include in the ad-supported tier,” Netflix co-CEO and chief content officer Ted Sarandos explained on the call. “We will clear some additional content, but certainly not all of it.”

A big library — Netflix produces a lot of content on its own that it doesn’t need clearance for, and apparently it’s confident that it can rely on those movies and shows to keep both subscribers who downgrade, and new sign-ups, interested in sticking around.

All of this could change after launch, of course. Netflix’s CFO, Spencer Adam Neumann, suggested the company wants to do more, but I have to say it’s a little bit disappointing as someone who would seriously consider watching ads to pay less for Netflix.

I don’t think I’m the only one who’s historically used Netflix’s original content as a tasting platter in between deeper dives into the service’s backlog. The company knows this is a common behavior; it’s why it likely spent hundreds of millions of dollars to secure the rights to Seinfeld in 2019. Even if Netflix would love for me to live on Is It Cake? and Is It Cake Alone?, there’s still a hunger for network TV comfort food.

The Hulu difference — When you compare Netflix’s proposed ad-tier to what you can get with Hulu’s version, where a $6.99 subscription gets you all of the Hulu Originals and the non-live TV catalog of shows and movies, it really doesn’t compare.

Netflix’s ad-tier is in its infancy — it hasn’t even launched yet — but it sure doesn’t sound like the compelling option it could be, at least so far.

Luckily for Netflix, it has an easier way to make up for its recent downturn and make money in the short-term: directly charging for the ability to share your account password. And, unfortunately for subscribers, it’s already asking for $2.99 a pop do it.