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Netflix Inc co-CEO Ted Sarandos said on Thursday that the streaming titan is in talks with several companies for advertising partnerships in an attempt to plug into slowing subscriber growth by rolling out a cheaper plan with ads.

Sarandos said, "we're not adding ads to Netflix as you know it today. We're adding an ad tier for folks who say 'hey, I want a lower price and I'll watch ads'." It is worth noting that after losing subscribers for the first time in a decade and projecting a 2 million decline in the upcoming quarter, Netflix said in April that it was seriously looking at advertising. 

According to the media reports from earlier this week, Netflix has been in discussions with Alphabet Inc's Google and Comcast Corp's NBCUniversal for potential marketing tie-ups. "We're talking to all of them right now," Sarandos said at the Cannes Lions conference when asked which company Netflix was looking to partner with, as per Reuters report.

Additionally, Netflix's competitor, Walt Disney Co's Disney has said it would introduce an ad-supported tier, as the pandemic boom in streaming fades, competition tightens and rising inflation pinches consumer spending on entertainment.

Meanwhile, in another development, Netflix Inc. laid off another 300 employees as the streaming giant seeks to bring costs under control amid uneven subscriber growth. The job losses are across the company, with most affected workers based in the US. The cut is twice as large as the one the streaming giant made last month. The news was first reported in 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," a Netflix spokesperson said in an email. “We are so grateful for everything they have done for Netflix and are working hard to support them through this difficult transition."

Netflix is retooling its operations after the departure of 200,000 subscribers during the first quarter of 2022 upended the company’s subscription-based revenue model. The difficulties have bludgeoned the company’s stock price and hurt worker morale, as per Bloomberg report.

In addition to the layoffs in May, Netflix also let go some contract workers and editorial staff from its Tudum site in April -- part of a scaling back of its marketing budget. Netflix’s subscriber woes were in part due to a price hike in January. Further, it’s facing heightened competition with streaming content from Amazon.com Inc., Walt Disney Co., and Hulu, all of which have posted subscription growth recently.

(With inputs from agencies)

 

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