Confirmed! Netflix Will Show Advertisements To Users Who Opt Low-Cost Plans

Confirmed! Netflix Will Show Advertisements To Users Who Opt Low-Cost Plans
Confirmed! Netflix Will Show Advertisements To Users Who Opt Low-Cost Plans

Netflix, in a recent note to its employees, told that the company could introduce its lower-priced ad-supported tier by the end of the year. The timeline of the same was rather more accelerated than what was originally indicated by the company.

Lower Price Ad Supported Version To Come Soon

Speaking on the condition of anonymity about the company’s internal discussions, two people who shared details of the communication, said that the Netflix executives said that they were aiming to introduce the ad tier in the final three months of the year.

Netflix, in the last month, stunned the media industry by not chilling, literally!

Previously the company clamped down password sharing and last month only the company stunned the media industry and Madison Avenue when after years of publicly stating that commercials would never be seen on the streaming platform and recently revealed that it would begin offering a lower-priced subscription featuring ads. 

All of this comes amid stiff business challenges that the streaming leader is facing. During the first quarter earnings last month, the company revealed that it has lost as many as 200,000 subscribers in the first three months of the year. This is the first time that such a thing happened in a decade. It is expected that the streaming giant would also lose 2 million more subscribers further. 

Post the announcement, the share price of Netflix has plummeted and this has wiped away roughly $70 billion in the company’s market capitalization.

CEO of Netflix, Reed Hastings, while speaking to the investors said that the company would examine the possibility of introducing an advertising-supported platform and that it would try to “figure it out over the next year or two.

The timeline, according to the recent update, has sped up like anything. The note said that “Yes, it’s fast and ambitious and it will require some trade-offs”.

A Netflix spokeswoman declined to comment.

The most popular Netflix plan costs $15.49 a month. The new ad-supported tier will cost less.

All Major Streaming Services Already Offer Ad Supported Version

No man is an island and similarly other streaming services like HBO Max are offering a commercial-free service for $15 a month and charges $10 a month for the service with advertising.

Citing their example, Netflix CEO addressed the investors that despite HBO and Hulu have provided an ad-supported service, but still they have been able to maintain strong brands.

The note said that “Every major streaming company excluding Apple has or has announced an ad-supported service. For good reason, people want lower-priced options.”

Previously while addressing the issue of password sharing, Netflix revealed that it would charge higher to subscribers who share their account with several people.

Greg Peters, Netflix’s COO, said on the company’s earnings call that “So if you’ve got a sister, let’s say, that’s living in a different city; you want to share Netflix with her, that’s great. We’re not trying to shut down that sharing, but we’re going to ask you to pay a bit more to be able to share with her.”

He added that before actually rolling out a plan, the company would go on a year or so iterating the same. 

In the note to employees, Netflix executives said that the advertising-supported tier for the streaming platform would be introduced “in tandem with our broader plans to charge for sharing.”

Comments are closed, but trackbacks and pingbacks are open.

who's online