Netflix may offer cheaper ad-supported tariff plans in the near future. During a recent call about the company’s revenue, CEO Reed Hastings said the streaming giant was currently working on the proposal and would finalize the details of the plans “within the next year or two.” Hastings said he found advertising difficult and is a big fan of easy subscriptions himself, but giving consumers who don’t mind watching ads an opportunity to pay less “matters a lot.”
And for the company, it may also make sense. In the first quarter of 2022, the service lost about 200,000 subscribers, which the company blamed on fierce competition, inability to expand in some areas due to technological limitations and account sharing. Apparently, 222 million users pay for Netflix, but more than 100 million use other people’s accounts.
Back in March, Netflix began testing a feature in Chile, Costa Rica and Peru that allowed subscribers to add two “sub-members” who would receive their own logins and profiles for $3. It may be only a small fraction of the cost of a full membership, but at least Netflix might get something from people who usually just use their friends’ accounts.
During the conversation, Hastings explained that membership with advertising support will be added in the form of tiers, and those users who do not mind paying the full subscription fee will not see advertising. “Obviously Hulu does it, Disney does it, HBO does it. We have no doubt that it works,” he said. The CEO also added that Netflix will simply be a publisher and will not track user data for advertising, as some of its competitors do.
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