Netflix could roll out its low-cost ad-supported tires by the end of the year, a faster timeline than originally indicated, the company told employees in a recent note.
In a note, Netflix executives said they aimed to release advertising tires in the last three months of the year, with two people who shared details of the communications on condition of anonymity to describe the company’s internal discussions. The note also states that Netflix plans to launch a crackdown on password sharing among its subscriber base at the same time, people said.
Last month, Netflix stunned the media industry and Madison Avenue when it announced it would begin offering low-cost subscriptions featuring ads that would never be seen on publicly streaming platforms for years.
But Netflix is facing significant business challenges. Announcing first-quarter earnings last month, Netflix said it lost 200,000 subscribers in the first three months of the year – the first time in a decade – and expects to lose another 20 million in the coming months. With the announcement of the subscriber, Netflix’s share price has plummeted, destroying nearly $ 70 billion in the company’s market capitalization.
Reed Hastings, co-chief executive of Netflix, told investors that the company would explore the possibility of introducing an ad-supported platform and would try to “find it in the next year or two”.
The latest note for staff indicates that the timeline has accelerated.
“Yes, it is fast and ambitious and will require some trade-offs,” the note said.
A Netflix spokesperson declined to comment.
Netflix offers different levels of payment for streaming access; Its most popular plan costs $ 15.49 per month. New ad-supported levels will cost less. Other streaming services have similar plans. HBO Max, for example, offers commercial-free service for 15 per month and charges $ 10 per month for advertising services.
Indeed, in a staff note, Netflix executives called on their competitors to say that HBO and Hulu are “able to maintain a strong brand while offering ad-supported services.”
“Every major streaming company except Apple has announced or has announced ad-supported services,” the note said. “For good reason, people want low-cost options.”
Last month, Netflix also announced that it intends to start charging higher prices from subscribers who have shared their account with many people.
“So if you have a sister, let’s say she lives in a different city – you want to share Netflix with her, that’s great,” said Greg Peters, Netflix’s chief operating officer, on the company’s earnings call. “We’re not trying to stop that sharing, but we’ll ask you to pay a little more to be able to share it.”
Mr. Peters said the company would “repeat the password sharing a year or more” before releasing a plan.
In an employee note, Netflix executives said the ad-supported tires would be introduced “together with our comprehensive plans to charge for sharing.”