Netflixco-CEO Ted Sarandos said the streaming giant was holding talks with several advertising firms about a partnership that would help it introduce cheaper memberships with advertising, according to reports.
“We’re talking to all of them right now,” Sarandos said Thursday, according to Reuters, when asked on the panel about advertising companies being sought for potential partnerships. The Sarandos Panel is part of the Cannes Lions advertising summit in France, one of the world’s largest annual events for the advertising industry.
These comments, and Netflix’s presence at Cannes Lions for the first time, further strengthens Netflix’s public commitment to introducing advertising to its service. In April, when Netflixco-CEO Reed Hastings reversed years of resisting interest in advertising by revealing that the company was “seeing” cheaper, ad-supported rates for Netflix.
But Netflix, which has no ad sales power, will need to hire people and build its own, acquire entities to absorb ad sales teams or technology, or form partnerships with existing ad companies.
Thursday, Sarandos’ comments indicated the company was pursuing the latter.
Sarandos also rejected the idea that Netflix would acquire Roku, a company that has built a thriving business around its own streaming service that people can watch for free with ads, called The Roku Channel. “I don’t know where it came from,” Sarandos said of speculation that he might buy a Roku, according to Deadlines.
The drop in viewership has shaken Hollywood’s belief in streaming as its engine into the future of television. Netflix’s years of relentless growth prompted nearly all of Hollywood’s major media companies to pour billions of dollars into their own streaming operations. This is calledbrings a new wave of services, including , , , and among other things, trends that complicate how many services you have to use — and pay — to watch your favorite shows and movies online.
With competition intensifying for your attention and your subscription dollars, most of Netflix’s rivals have switched to the two-tier model, which offers a cheaper membership to watch with ads as well as a more expensive subscription without ads. Netflix is paving the way for streaming TV, but its ad-free strategy has lagged behind industry standards, as competitors launched giving viewers like you more choices.