According to reports, two people familiar with the matter said today that the streaming video service provider Netflix has told employees that it plans to launch a low-cost subscription model with ads by the end of this year. Apparently, that timeline is much earlier than one might expect.
Netflix plans to launch a low-cost ad-supported subscription service in the fourth quarter of 2022, Netflix executives said. At the same time, Netflix also plans to start cracking down on password sharing among users around the same time.
Netflix stunned the media and advertising industry last month when it said it planned to offer a low-cost subscription service that includes ads. Because Netflix has publicly stated for years that commercials will never be seen on its platform. Originally, the industry expected Netflix to launch the cheaper, ad-supported subscription service in a few years.
Clearly, Netflix’s business faces serious challenges. Netflix shocked Wall Street last month when it released its first-quarter 2022 earnings report with a loss of 200,000 subscribers. This is also the first time the company has lost subscribers since 2011. Netflix also expects to lose another 2 million subscribers in the second quarter of this year.
In addition to rolling out ads, Netflix is also preparing to crack down on those who share passwords. Netflix said it expects more than 30 million U.S. and Canadian households to use shared passwords to access its content. Globally, there may be more than 100 million households using shared passwords.
Currently, Netflix offers multiple subscriptions, the most popular of which is $15.49 per month. Obviously, the new ad-supported package will cost less.