It has not been a month since the streaming giant Netflix announced its declining revenue rate due to the loss of subscribers for the first time in ten years. The company is worried that this might just be the starting and things could get much worse. So to counter this, the company has decided to add a lower-priced ad-supported tier to its streaming services. As per NYT, it is aiming to launch the new plan sometime in the final three months of 2022.
Netflix’s CEO Reed Hastings said in April that the company is open to the idea of adding commercials to the services, which shocked many as for years Hastings has talked about why Netflix doesn't require commercials and never even supported the idea.
"Those who have followed Netflix know that I've been against the complexity of advertising and a big fan of the simplicity of subscription. But as much as I'm a fan of that, I'm a bigger fan of consumer choice," Hastings said on the post-earnings call last month. "And allowing consumers who like to have a lower price, and are advertising tolerant, get what they want makes a lot of sense."
In April, Hastings added how they were planning ways to bring ads to the platform over the next few years. However, with some reports popping up, the new ad-supported tier of Netflix could arrive by the year’s end.
As other platforms like Disney Plus and HBO Max have also been incorporating ad-supported tiers, Netflix could soon follow suit. For the streaming giant, this seems to be a way of raising revenues, as it lost 200,000 users in the first quarter of 2022, and they are expecting to lose another two million in the second quarter. No matter what path Netflix chooses, it is surely going to affect the experience for its users.
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