Netflix could introduce ads by end of the year

A crackdown on password sharing could also be on the cards, with features already being tested in Chile, Costa Rica, and Peru
Netflix could introduce ads by end of the year

The streaming service announced last month that it was planning to introduce a new lower-priced subscription tier that would feature ads.

Netflix could introduce advertisements to its service by the end of this year.

In a surprising move last month, the streaming service announced that it was planning to introduce a new lower-priced subscription tier that would feature ads.

No exact timeline was originally given for the model, with co-chief executive Reed Hastings telling investors that the company would “figure it out” over the next year or two.

However, a note to employees obtained by The New York Times this week revealed an acceleration of this.

According to the outlet, Netflix executives told employees that the company was planning to introduce the new ad tier in the final three months of 2022.

The streaming giant, which has avoided advertising on its services for years, reported its first-ever quarterly subscriber loss last month, causing shares in the company to plunge. In total, Netflix Inc’s stock has declined more than 40% so far this year.

Netflix, still the leader in the streaming market, currently has around 221m subscribers - but stated in April that it expects to lose 2m this quarter.

"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 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."

The Times reports that the service could also begin cracking down on password sharing at the end of this year.

According to the company’s latest financial report, subscribers are sharing their passwords with over 100m additional households.

A crackdown on password sharing was announced in Chile, Costa Rica, and Peru earlier this year.

Two features, that may soon be introduced to more regions, are currently being tested there: the ‘Extra Member’ feature where users can pay a small fee to add two people who live outside of their household to their account, and ‘Profile Transfer’, where subscribers can transfer their information to a new account and not lose their history.

“These are households that are already choosing to view the service. They love the service, we have just got to get paid at some degree for them,” Hastings said.

Netflix raised its prices for Irish consumers in March, with the basic package increasing to €8.99 a month, the standard package rising to €14.99, and the premium subscription increasing by almost 17% to €20.99 a month - one of the most expensive rates worldwide.

It is not yet known how much the new, lower-priced, tier will cost.

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