Netflix’s race to the finish line with its new ad-supported plan is nearly complete. The company’s new Basic with ads plan launches tomorrow, No.v 3, but new subscribers may notice their favorite show is not available upon launch.

That’s because Netflix is still in negotiation with some of the biggest studios in Hollywood to allow content that it licenses from those studios to be shown with ads, according to the Wall Street Journal. Netflix has been in negotiations with these studios since the summer, but its haste to get its ad-supported tier to market before Disney+ launches its ad-tier on Dec. 8 has put the streaming giant in a bit of a time-crunch.

The WSJ’s reporting indicates that Netflix has not yet finalized licensing agreements with Disney, NBCUniversal, Sony Pictures Television, Warner Bros. Discovery, or Lionsgate, with WBD being the studio closest to an agreement. That means that popular shows like “Breaking Bad,” “Grey's Anatomy,” “You” and “Cobra Kai” will essentially be behind a paywall when the new plan with ads goes live.

The sticking point, as always between companies of this size, is money. Netflix reportedly asked for a much higher rate from advertising companies than networks usually get to run ads next to their programming. The company denies asking for exorbitant fees, but if it did, it would certainly explain why major studios are asking for a bigger slice of the pie.

In fact, studio partners may request anywhere from 15% to 30% premiums on top of their current contracts to allow the streamer to feature their content on an ad-supported video-on-demand (AVOD) tier. These numbers fall in line with the 20% additional fees Netflix was required to pay after allowing subscribers to download content on its more expensive tiers.

Industry analysts suggest that Netflix could see up to $600 million in additional revenue from its AVOD plan in its first year alone, so studios will likely be unreceptive if Netflix is trying to lowball them. The company also added 2.4 million new subscribers in the third quarter, bringing its global total to 223 million. With that many paying customers, Netflix will likely end up having to bite the bullet in meeting studio demands for more money, especially considering that they are up against a deadline of the streamer’s own making.

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Netflix is a leading subscription-based video streaming service that offers on-demand access to an extensive library of over 3,000 movies, 2,000+ TV shows, and a growing collection of acclaimed Netflix originals. Renowned for producing groundbreaking content, Netflix has become a cultural powerhouse with hit originals like “Stranger Things,” “Wednesday,” “Squid Game,” “The Crown,” “Tiger King,” “Bridgerton,” “The Witcher,” and “Black Mirror.”

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The platform constantly updates its catalog, introducing fresh content alongside timeless classics and international hits. Netflix’s commitment to storytelling has also earned critical acclaim, with award-winning exclusives such as “Roma,” “Marriage Story,” “The Power of the Dog,” “Mank,” and “Ma Rainey’s Black Bottom.” In 2023, their animated film “Guillermo del Toro’s Pinocchio” won an Academy Award for Best Animated Feature, further solidifying Netflix’s reputation for high-quality content.

Recently, Netflix has expanded beyond standard movies and TV titles with the addition of video podcasts, and is also exploring a digital store that would offer third-party streamers within the app.

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