Netflix held its Q2 2022 earnings call this week, with the most significant piece of news being the loss of one million subscribers from the streaming platform over a three-month period.

The other key piece of information revealed during the call, which you are able to see an interview of in a video here, is the fact that the platform’s upcoming ad-supported tier will not have access to all the content the more expensive subscriber plan does.

Much of this boils down to licensing, with Netflix having agreements in place with studios and production companies based on the current model of the platform, which does not involve ads.

“Today, the vast majority of what people watch on Netflix, we can include in the ad-supported tier. There are some things that don’t — that we’re in conversation about with the studios on — but 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,” noted co-CEO Ted Sarandos in the earnings call.

“It’s certainly a nice to have. But it’s not a must-have. As Ted says, we can launch today without any additional content clearance rights. Hopefully we can supplement that, but we’ll be disciplined in what we do,” added CFO Spencer Neumann.

Whether those subscribers paying for a cheaper ad-supported tier will feel the same way remains to be seen.

That said, much of this will depend on precisely how much content is missing, and indeed whether all of the Netflix originals will be present. If the latter is the case, it may make the fact that not everything being available a little more palatable.

Given that content libraries on Netflix already differ based on what part of the world you are, this is really nothing new for current subscribers. As such, that cheaper tier will need to be significantly less expensive to be appealing.

No date has been slated for its launch, so we will need to wait to see when Netflix is ready to roll out its ad-supported tier. For now though, it comes with a caveat.

https://www.youtube.com/watch?v=niA_ECTcpvM