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Netflix (NASDAQ:NFLX) is reportedly looking to amend programming deals with some of the top entertainment studios, according to a report from The Wall Street Journal on Tuesday.
The move is part of the company’s plans to have content on an advertising-supported tier of the service, said the WSJ, citing people familiar with the matter.
Netflix is said to have started talks with Warner Bros, Universal, and Sony Pictures Television.
While the streaming giant is looking to amend deals for shows made specifically for Netflix, it will also need to renegotiate agreements for older television shows streamed on the platform.
The WSJ states that obtaining new agreements is crucial for Netflix’s potential ad-supported tier, with the company making its own content and also acquiring content from other companies. They added that studios would likely desire a premium of 15% to 30% over existing contracts.
In the report, a Netflix spokeswoman was quoted as saying they are “still in the early days of deciding how to launch a lower-priced, ad-supported option, and no decisions have been made.”
While amending deals isn’t unheard of, Netflix seems to be in a rush as it wants to launch an ad-supported tier by the fourth quarter of this year. The WSJ reported Monday that the company has stepped up its search for an executive to head up the creation of its ad-supported tier service, while they also said last month that Netflix had held talks with potential partners, such as Comcast (NASDAQ:CMCSA) and Alphabet’s (NASDAQ:GOOGL) Google, about the ad technology and sales force it needs.
