A few weeks ago we reported that Netflix wants to change its strategy a bit and working on offering an ad-supported tier to try and recover some subscribers (the service is losing subscribers), and now, 9to5Mac reports that the company could speed up the process.
Netflix’s ad-supported tier may be coming sooner than expected
Netflix’s subscriber base experienced a rare decline last quarter. Now it looks like the company is eager to add some more users to binge watch the latest shows, and some of this effort is actually a new level. This new subscription level will be more affordable and ad-supported, although Netflix has long been against having an ad-supported service. And it looks like this level could come sooner rather than later. It is reported that Netflix hopes to make the ad-supported tier available in the fourth quarter of this year, essentially before 2022.
The info came in an email to employees sent out by the streaming service. Imagine the surprise employees felt after this email (and the office gossip, we might add), after Netflix CEO Reed Hastings said during last quarter’s earnings call that it would take a year or two. may take to roll out the ad. supported layer.
Yes, Netflix has decided to go Fast and Furious on the plan. The email explained that the target is “fast and ambitious” (actually it would have been a really good joke if the email was fast and furious, but ok) and there are some tradeoffs to be made.
Plus, Netflix also pointed out that every major streaming company has or has announced an ad-supported service (of course, with the exception of Apple, but you know, the Cupertino company has its own ways of getting people to pay). And that customers need cheaper options.
Despite all the talk about fuel tank loading and acceleration, not much is known about that new, cheaper Netflix tier just yet. We don’t know how much it will cost at the moment. Currently, the cheapest Netflix plan is $10 a month, and you’re missing out on 4K streaming. 4K streaming is available for the $20 per month subscription. And yes, Netflix has recently increased its prices as well.
Netflix must also tackle password sharing
One thing that was also addressed in the email we mentioned above was password sharing. Netflix is aiming to tackle the password-sharing problem as it plans its ad-supported tier. The company wants to charge more for password sharing. Basically, making password sharing “easier and more secure”, but you have to “pay a little more”.
Netflix hopes to make those changes in parallel with the launch of the ad-supported subscription tier.
These two changes are intended to address the subscriber numbers and revenue issue that the streaming service is currently experiencing. For those of you who don’t know, Netflix reported losing 200,000 subscribers last quarter and expects to lose possibly two million this quarter (that’s a lot of people pressing ‘unsubscribe’ on Netflix…).
Understandably, following the announcement of the loss of subscribers, Netflix’s stock has fallen more than 20% and the company’s stock has fallen more than 40% so far in 2022.
For those of you curious about the exact numbers, here’s some reference: On April 19, 2022, Netflix’s stock price was $348.61 and the next day it had fallen to 226.19 on April 20… since then it’s been unable to recover this stock price of $348, and at the time of writing it stands at $177.66. Netflix does indeed have some issues that need to be addressed, and the sooner it does that, the better.