Netflix will launch an ad-supported subscription tier by the end of 2022, it was revealed yesterday (May 9).
The New York Times reports that Netflix executives have told employees they hope to introduce a lower-cost ad-supported tier by the end of the year, a much faster timeline than previously announced.
Things moved very quickly for Netflix, as in early March the company's CFO, Spencer Neumann, only went so far as to say "never say never" when asked about the idea of introducing ads on Netflix and it did. . as clarifying that the measure "was not something in the plans right now".
Then, on April 20, in an earnings call, Netflix boss Reed Hastings revealed that the streaming service was "quite open" to the possibility of an ad-supported tier. This was after he was quoted earlier suggesting that an ad-supported offering would be something Netflix might "figure out in the next year or two."
"Widely open" has now apparently moved on to "what is definitely happening", and Neumann's "not yet" seems to only last until October...
The news comes at the same time it was confirmed that Netflix will start cracking down on password sharing later this year.
The streaming giant is making the move as it looks to shore up its revenue. At the end of April it announced that it had lost 200,000 subscribers since the beginning of 2022 and saw its value drop by more than €50 billion as a result.
The announcement saw Netflix cancel a host of shows, park many of its projects in development, including one from Prince Harry and Meghan Markle, and shut down Tudum, the streaming giant's publishing presence.
A lower price level with advertising is not a revolutionary idea for a subscription service. Hulu, HBO Max, Paramount Plus and Peacock are already doing this and Disney Plus will offer the option this year, the reason it's a surprise is because the higher ups at Netflix were adamant weeks ago, that was just an idea. .
Analysis: Is Netflix panicking?
There is a bit of panic. It's just to say. Netflix's change of heart was swift and, coupled with its new crackdown on password sharing, suggests the company is struggling.
Offering subscribers a cheaper option is never a bad thing, and it's much better to save money by laying off employees and canceling shows. Things seem to be moving so fast for Netflix, every day seems to bring new dramas, and this announcement isn't going to help anything.
A quiet period and maybe some show renovations would help. Let's wait and see...