Netflix reportedly enters talks with Hollywood studios over ad offering

Ahead of launching its ad-supported tier later this year, Netflix has reportedly begun with talks with Hollywood studios to alter its programming deals.

According to the Wall Street Journal, Netflix has entered into talks with Warner Bros. Universal and Sony Pictures Television, with the streaming leader requiring approval from rights holders to place ads against their shows.

The report goes on to note that it is yet to initiate talks with Paramount Global and Sony, whose major shows on Netflix include NCIS and Breaking Bad respectively. 

While it intends to launch before the end of the year, Netflix’s ad-supported tier is still in the early days of development with pricing yet to be decided. 

From a tech perspective, a report last month said that NBCU and Google have emerged as the favourites to work with Netflix to create the ad product. Google already has a commercial relationship with Netflix, and serves as Disney’s DTC adtech partner.

Disney meanwhile is also plotting its own ad-supported offering for Disney+, an option which the company expects most of its subscribers will shift to. 

Speaking in May, Disney CFO Christine McCarthy said: “Based on our Hulu experience, we actually have more AVOD than SVOD subscribers. We expect about the same percentage for both Disney+ and Hulu, just based on the experience curve that we’ve witnessed.”