Netflix Confirms Plans For Ad-Supported Service, Begins Second Round of Layoffs

According to the Wall Street Journal, Comcast's NBCUniversal subsidiary and Google are the "top contenders" for Netflix's upcoming ad-supported streaming tier. "After many years of resisting ads, Netflix CEO Reed Hastings announced the plan for an ad-supported tier in April," reports Ars Technica. "Netflix's stock price dropped 35 percent the day of that announcement, and Netflix revenue growth has been slowing amid a loss in subscribers." From the report: A deal with NBCUniversal would likely mean that "Comcast's video ad unit, FreeWheel, would supply technology to help serve up ads, while NBCUniversal's ad-sales team would help sell ads in the US and Europe," the report said. The Alphabet-owned Google, of course, has plenty of experience serving ads, including on its own YouTube and YouTube TV video platforms. Netflix already uses Google's ad-buying tools.

A deal with either NBCUniversal or Google would likely be exclusive, the WSJ report said. Comcast/NBCUniversal and Google aren't the only contenders, as "Roku has also had early talks with Netflix about ad partnerships," the report said. The Information reported last week that Netflix executives recently "met with representatives of both Roku and Comcast to discuss arrangements under which those companies would handle either the ad sales or the technical infrastructure for Netflix's forthcoming ad-supported tier of service."

Netflix "is looking to start doing some pre-roll ads, which run before a show starts, in the fourth quarter," The Information report said. Netflix is also negotiating with entertainment companies to put ads into shows that Netflix doesn't create itself. Licensing TV shows and movies for both ad-free and ad-supported streaming will cost Netflix about 20 percent more than for ad-free streaming alone, The Information report said.

Variety has confirmed the streamer is "letting go of roughly 300 staffers [...] across multiple business functions in the company, with the bulk of the jobs lost in the U.S." Netflix also laid off 150 employees, and dozens of contractors and part-time workers in May.

"Today we sadly let go of around 300 employees," a Netflix spokesperson told Variety. "While we continue to invest significantly in the business, we made these adjustments so that our costs are growing in line with our slower revenue growth. We are so grateful for everything they have done for Netflix and are working hard to support them through this difficult transition."

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