Ads would hit Netflix much sooner than we originally expected. As reported New York Timesthe streaming platform plans to introduce its cheapest plan —but with ads— before the end of the year. The news has already been reported to the company’s employees.
If materialized, this represents a major change in strategy for the company. When Netflix CEO Reed Hastings announced the service would be moving toward an ad-supported subscription variant, he said they would take a year to review the proposal. And even he predicted that it could take up to two years to have a global launch.
However, times have changed. The new intention of the platform is to incorporate the plan with advertising support in the final quarter of 2022. So between October and next December we could find important news on Netflix, while the company tries to straighten the course after the dire loss of users recently reported.
The news that the plan with ads will arrive this year speaks clearly that the movie and series streaming service does not want to lose more ground with its rivals either. And the company knows that advancing its plans around this possibility has its risks. “Yes, [el cambio] it is fast and ambitious and will require some trade-offs. Every major streaming company except Apple has or has announced an ad-supported service. For good reason, people want lower priced options,” the note sent to employees reads.
Additionally, Netflix believes that earlier adoption of an ad-supported subscription variant won’t cheapen your image. In the same internal statement, the firm uses Hulu and HBO Max as examples: “They have maintained strong brands while offering ad-supported services,” they said.
Ads will arrive on Netflix in the last quarter of 2022
The arrival of the ads on Netflix will mark a major change in the company’s business strategy. One more, actually, of several that have come to light lately. Recall that the streaming platform recently confirmed that it lost 200,000 subscribers in the first quarter of this year; and the predictions for the second quarter are even more catastrophic, as an additional 2 million users are expected to drop.
The news meant a strong blow not only for the company itself, but also for the entertainment industry in general. Going forward, Netflix plans to adopt more financial discipline and therefore cut the amount of original content it releases per year, to focus on quality. This does not imply reducing the investment in its own series and films, but rather focusing the money in those productions that offer great returns (regardless of criticism).
But the early arrival of the cheap, ad-supported subscription plan won’t come alone. Netflix also plans advance the introduction of measures to prevent users from continuing to share their account passwords. Although the internal mail sent to the employees does not specify too much, the intention of the company would be to charge a more expensive price to the subscribers that it detects sharing their access.
Netflix sees shared accounts as a serious detriment to its business model. According to the company, if it were able to convert all the people who use the same account into individual subscribers, could add 100 million more customers.