Shonda Rhimes is leading a group of creators upset by Netflix's new ad-supported tier because it interrupts storytelling, report says

• Shonda Rhimes is among creators unhappy with Netflix's new ad-supported tier, sources told CNBC.
• Creators like the makers of "The Haunting of Hill House" say the tier upsets storytelling.

Bridgerton producer Shonda Rhimes is leading a creator backlash against Netflix over its mid-video advertisements, arguing that it hurts storytelling, a report says.

Sources told CNBC that the influential showrunner, who also produced "Inventing Anna," had expressed displeasure with Netflix over its use of ads within programming.

Intrepid Pictures' Trevor Macy and Mike Flanagan, who are behind "The Haunting of Hill House," also shared concerns, the sources said.

Netflix's new ad-supported tier, which launched Thursday for $7 a month, is a pivotal feature in Netflix's strategic turnaround after it began shedding subscribers earlier this year.

Insider's Travis Clark reviewed the new ad-supported tier and found there was a minute's worth of ads for every 10 - 20 minutes of programming, with around two minutes and 30 seconds of ads for an hour-long show.

Netflix subscriptions, including those without ads, can go up to $20. The next tier up from the ad option is a "Basic" plan for $9.99 per month.

In October, prior to the launch of the ad tier, Netflix said it was employing "internal content tagging teams" to help find "natural breakpoints" in programming to make ads as unobtrusive as possible.

But "Hill House," which consists of a set of extended, high suspense one-shot scenes, has fewer opportunities to find those breakpoints without compromising storytelling. Sources told CNBC that Netflix's lack of ads was key behind Intrepid Pictures signing a multi-year deal with the streamer in 2019.

Sources told CNBC that other Netflix creators, like "Dahmer" creator Ryan Murphy, whose shows are split neatly into three acts, and "The Queens Gambit" co-creator Scott Frank, were fine with the new tier.

The streamer doesn't intend to share advertising revenue with creators, even as a means of placating unhappy creators, the sources said. Netflix argues that ad-paying subscribers wouldn't watch the content at all on the more expensive ad-free tiers, per CNBC.

Rhimes was lured away from ABC, where she ran "Grey's Anatomy," with an exclusive $150 million deal to make shows for Netflix, back when Netflix said it had no interest in introducing advertising.

Netflix didn't immediately respond to Insider's request for comment made outside normal working hours.