Netflix’s free tier will have one major drawback, CEO says

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Netflix’s new free tier will not include all the content currently on its streaming service.

The company’s co-chief executive Ted Sarandos said that while “the vast majority of what people watch on Netflix” can be included in the ad-supported tier, “there are some things that don’t — that we’re in conversation about with the studios on”.

He continued: “If we launched the product today, the members in the ad tier would have a great experience. We will clear some additional content, but certainly not all of it, but we don’t think it’s a material holdback to the business.”

Mr Sarandos made the comments during Netflix’s earnings call.

It is unclear what content exactly will be missing from the ad-supported tier – whether this will be third-party content or whether certain ‘original series’ will not be included. Netflix did not respond to The Independent’s request for comment before time of publication.

Netflix has had to add an ad-supported tier as subscribers and revenue falls. The streaming giant lost 200,000 subscribers during the first three months of the year amid stiffer competition and rising inflation that has pressured household budgets.

Netflix’s stock dropped by 70 per cent, wiping out £160.4 billion off the market value. It also announced that it was firing staff in the US in the United States.

As well as this new tier, Netflix is also introducing restrictions on password sharing - charging people extra if they use their account in more than one place.

Netflix will scan users’ devices and their account activity to find out when their logins are being used. It will cost $2.99 for each extra location one.

“Information such as IP addresses, device IDs, and account activity” will be used to monitor users, Netflix says.