Netflix could possibly launch its lower priced, ad-supported tier by the end of 2022. Clearly, this would be sooner than originally planned, as they informed the employees in a note recently.
In it, the executives stated that the aim was to introduce the ad tier in last three months of this year. Two people revealed the details of this particular communication, requesting to remain anonymous in order to specify internal company discussions. Additionally, the note stated that the video streaming services is set to crack down on password sharing among subscribers at the same time.
Netflix took the media industry and Madison Avenue by surprise in April when it disclosed its plans for the ad-supported tier. It would be offering this lower-priced subscription after claiming to never show commercials on its platform for years.
Unfortunately, the video streaming service had been going through significant losses in its first year. For the first time in a decade, Netflix lost 200,000 subscribers in the first three months of the year. They are expecting to lose 2 million more in the coming years.
CEO Reed Hastings told investors that they would test the possibility of introducing an ad-supported platform. Along with it, try to ‘figure it out over the next year or two.’
“Every major streaming company excluding Apple has or has announced an ad-supported service,” the note said. “For good reason, people want lower-priced options.”
Netflix had referred to its competitors, Hulu and Disney Plus while stating how other platforms had also introduced ad-supported subscriptions. It had discussed its interest in developing its advertising infrastructure externally and, with a firm called The Trade Desk. It mainly helps advertisers place advertisements on several internet enabled outlets, according to a person familiar with the discussions.
The company counts the former chief financial officer of Netflix, David Wells as a member of the board. The person said that The Trade Desk had been in touch with the company for a while now. However, recently the discussions ramped up, following Netflix announcing publicly about its creation of an advertising tier.
In April, the video streaming service had announced that it had to intention to start off with another form of fee. This would be for subscribers who visibly shared their account with various people, outside their own households.
In this note to the employees, the executives of Netflix stated that the advertising-supported tier would be introduced “in tandem with our broader plans to charge for sharing.”