Netflix plans to offer cheaper ad-supported subscription tiers

Netflix may offer cheaper ad-supported plans in the coming years. In company most recent earnings callCo-CEO Reed Hastings has disclosure that the streaming giant is currently working on the offering and that it will finalize the final details of those plans “in the next year or two.” Hastings said he finds the ads complicated and he’s a big fan of the simplicity of sign-up, but offering consumers who don’t mind viewing ads the option to pay less “makes a lot of sense.”

And it could also make sense for the company. The service lost about 200,000 subscribers in the first quarter of 2022, a development it blamed on stiffer competition, an inability to scale in some territories due to technology constraints. technology and account sharing. Apparently, 222 million households are paying for Netflix, but more than 100 million others are sharing those accounts.

Back in March, Netflix start testing a feature in Chile, Costa Rica and Peru that allows subscribers to add two “extra members” who will receive their own login information and profiles, for $3. It may be a fraction of the cost of a full membership, but at least Netflix is ​​getting something from people who normally just borrow their friends’ accounts.

Hastings clarified during the call that ad-supported memberships will be added as tiers, and that members who don’t mind paying the full subscription fee will not be subject to advertising. “Obviously it’s working for Hulu, Disney is doing it, HBO is doing it. We have no doubt it’s working,” he said. The executive also added that Netflix will be merely a publisher and that it will not track user data to match ads as some of its competitors do.

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