Netflix plans to launch an ad-supported tier by the end of 2022; tackle password sharing

Netflix plans to launch an ad-supported tier by the end of 2022; tackle password sharing
A few weeks ago, we reported that Netflix is looking to change its strategy a bit and work on offering an ad-supported tier in order to try to recover some subscribers (the service has been losing subscribers), and now, 9to5Mac reports that the company could be accelerating the process.

Netflix's ad-supported tier might come faster than expected

Last quarter, Netflix's subscriber base experienced a rare drop in its numbers. Now it seems the company is keen on adding some more users to binge-watch the latest shows, and a part of this effort is actually a new tier. This new subscription tier will be more affordable and ad-supported, although, for a very long time, Netflix was against having an ad-supported service.

And it seems this tier might come sooner rather than later. Reportedly Netflix is hoping to make the ad-supported tier available during the fourth quarter of this year, so basically, before 2022.

The info came in an email to employees that the streaming service sent out. Imagine the surprise the employees felt from this email (and the gossip in the office, we might add), after the fact that during last quarter's earnings call Netflix CEO Reed Hastings said that it could take a year or two to roll out the ad-supported tier.

Yes, Netflix has decided to go Fast and Furious on the plan. The email explained that the goal is "fast and ambitious" (it would have actually been a very good joke if the email said fast and furious, but oh well) and will require some trade-offs to happen.

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On top of that, Netflix also pointed out that every major streaming company has or has announced an ad-supported service (of course, excluding Apple but you know, the Cupertino company has its own ways of making people pay). And that customers need lower-priced options.

Despite all the fuel tank loading and acceleration talks, there's not much known about that new Netflix lower-priced tier yet. We don't know how much it will cost at the moment. Currently, the cheapest Netflix plan is $10 per month, and you will miss out on 4K streaming with it. 4K streaming is available for the $20 per month plan. And yes, Netflix recently increased its prices too.

Netflix also has to tackle password sharing

One thing that also got addressed in the email we mentioned above was password sharing. Netflix is aiming to crack down on the password sharing issue at the same time as it is planning its ad-supported tier. The company wants to charge more for sharing passwords. Basically, making the password sharing more "easy and secure", but you will need to "pay a bit more".

Netflix hopes to implement those changes simultaneously with the launch of the ad-supported subscription tier.

These two changes are aiming to tackle the issue with subscriber numbers and revenue that the streaming service is currently experiencing. For those of you who are unaware, last quarter Netflix reported to have lost 200,000 subscribers and expects to potentially lose two million this quarter (that's a lot of people pressing 'cancel subscription' on Netflix...).

Understandably, after the announcement of the lost subscriber count, Netflix shares dropped more than 20%, and the company's stock has declined by more than 40% so far in 2022.

For those of you who are curious about the exact numbers, here's some reference: on April 19, 2022, Netflix's share price was $348.61, and the next day, it had dropped to 226.19 on April 20... since then, it has been unable to reach back this $348 stock price, and at the time of writing, it sits at $177.66. Netflix does indeed have some problems to address, and the quicker it does that, the better.

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