Netflix can provide a file Ad-supported low price tier By the end of the year, a faster schedule than originally stated, the company told employees in a recent note.
In the memo, Netflix executives said they aimed to introduce the ad layer in the last three months of the year, according to two people who shared contact details, who spoke on the condition of anonymity to describe the company’s internal discussions. The memo also said they were planning to start cracking down on password sharing among their subscriber base around the same time, the people said.
Last month, Netflix stunned the media industry and Madison Avenue when it revealed that it will begin offering a low-priced subscription that includes ads, after years of publicly stating that commercials will never be seen on the streaming platform.
But Netflix faces major commercial challenges. in ad first quarter earnings Last month, Netflix said it lost 200,000 subscribers in the first three months of the year – the first time this has happened in a decade – and is expected to lose another 2 million subscribers in the coming months. Since the joint announcement, Netflix’s stock price has fallen sharply, wiping out nearly $70 billion from the company’s market value.
Netflix co-CEO Reed Hastings told investors that the company will study the possibility of offering an ad-supported platform and that it will try to “find that out over the next year or two.”
A recent memo to staff indicated that the schedule had accelerated.
“Yes, it is fast and ambitious and will require some trade-offs,” the memo said.
A Netflix spokeswoman declined to comment.
Netflix currently offers a variety of payment levels to access the streaming service; Its most popular plan costs $15.49 per month. The new ad-supported tier will cost less. Other streaming services have similar plans. HBO Max, for example, offers a commercial free service for $15 per month, and charges $10 per month for the service with ads.
In fact, in the memo to employees, Netflix executives teased their competitors, saying that HBO and Hulu were able to “maintain strong brands while offering an ad-supported service.”
“Every major streaming company except Apple has announced or has announced an ad-supported service,” the memo reads. “For good reason, people want lower-priced options.”
Last month, Netflix also announced that it intends to start charging higher rates to subscribers who share their account with multiple people.
“If you have a sister, let’s say, who lives in a different city; you want to share Netflix with her, that’s great,” Greg Peters, Netflix COO, said on the company’s earnings call. So we can share it with her.”
Mr Peters said the company will continue “within a year or so of iteration” to share the password before the plan is rolled out.
In a memo to employees, Netflix executives said the ad-supported tier of the streaming platform will be introduced “along with our broader plans to charge for participation.”
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