Netflix has reportedly entered into discussions with studios including Warner Bros., Universal and Sony Pictures Television to revise licensing terms to include their content on the streamer’s planned ad-supported tier. The talks include shows created specifically for Netflix — like Sony’s “The Crown” and Universal’s “Russian Doll” — as well as second-run programming like Sony’s “Breaking Bad” and Paramount Global’s “NCIS.” Sources say the studios will likely be angling for a premium of 15 percent to 30 percent for duplexing the shows on the new tier. While Netflix self-produces some original content in-house, much of it is acquired externally.

Deep program offerings on Netflix’s new ad-supported tier will be crucial to its chances of success, observers say. Yet those who manage studio libraries have a duty to maximize revenue. “Any distributor being approached by Netflix is going to take steps to ensure they get proper value,” Jeffrey Schlesinger, former Warner Bros. Television exec who now runs the media advisory group Former Bros. Media told The Wall Street Journal.

Warner Bros. Discovery’s HBO Max rolled out an ad-supported tier last summer, and Disney is planning the same for its Disney+ streaming service. Both firms have larger in-house libraries than Netflix.

This is not Netflix’s first adventure in licensing renegotiation. In order to offer content download capability for offline viewing, which began in 2016, the company had to renegotiate third-party terms, resulting in what one source estimated was a premium of between 10 percent and 15 percent tacked onto the original amount.

Netflix says it could launch its lower-priced, ad-supported tier as early as Q4. Although inevitably a portion of premium subscribers will opt for savings and switch to the cheaper tier, a recent study suggests such shifts are minimal and the chances to add new subscribers is promising.

In June, Netflix co-CEO Ted Sarandos said the company had begun talks with third parties for advertising partnerships. Google and NBCUniversal were mentioned as potential sources for technology or sales help. Yesterday, however, Netflix “named Microsoft as its partner for its ad-supported service,” reports CNBC.

The Wall Street Journal notes that Netflix is interviewing external candidates for a new senior role managing its ad-supported tier.