Netflix is attempting to alter its programming deals with Hollywood studios in order to create an ad-supported version of the service, according to the Wall Street Journal.
The streamer has been in discussions with Warner Bros., Universal and Sony Pictures Television. It will also have to renegotiate contracts for older television programs including Breaking Bad from Sony and NCIS from Paramount Global.
The WSJ reports if Netflix wants an ad-supported tier to offer a catalog of content as extensive as its commercial-free options, obtaining such permits is necessary. Netflix produces a lot of its own material, but it also buys content from other firms and licenses many of its own programming.
A Netflix spokesperson told the news outlet the streamer is still in the “early days of deciding how to launch a lower-priced, ad-supported option, and no decisions have been made.”
By the fourth quarter of this year, Netflix hopes to launch an ad-supported version of its service, according to content providers, the WSJ reports.
Netflix announced in April that it was considering the launch of a lower-priced tier with advertising after losing subscribers for the first time in ten years and predicting a 2 million decrease in the upcoming quarter.
Netflix co-CEO Ted Sarandos confirmed the global introduction of ads after months of speculation at the Cannes Lions advertising conference in June. He recently told Le Journal du Deimanche that ads would attract more subscribers, allowing them to watch content at a lower cost.