Streaming giant, Netflix, is considering the introduction of cheaper ad-supported plans to address the huge subscriber loss the company is experiencing.
Revealed by Co-CEO Reed Hastings on Tuesday at the company’s Q1 earnings interview, the company expects to conclude this ad-supported strategy within the next year or two, saying that “but think of us as quite open to us offering even lower prices with advertising as a consumer choice.”
“Those who have followed Netflix know that I have been against the complexity of advertising and a big fan of the simplicity of subscription,” Hastings said. “But as much as I am a fan of that, I am a bigger fan of consumer choice, and allowing consumers who would like to have a lower price and are advertising-tolerant to get what they want makes a lot of sense.”
Netflix lost 200,000 subscribers in its first quarter compared to its forecast of 2.5 million subscribers and it is also predicting deeper losses ahead.
The ad-supported plans will look to grow the streaming giants’ subscriber additions. Previously, the company has been experimenting with pricing in different markets such as the free plan in Kenya.
The loss of followers follows a threat by the company to start charging users who share their credentials. The company had noted that more than 100 million users watch Netflix by borrowing credentials from others.
Interestingly many of Netflix’s competitors are already offering cheaper, ad-supported plans. Hulu, HBO Max, NBCUniversal’s Peacock, and Paramount+ all have ad-supported plans and Disney last month announced it would introduce its ad-supported Disney+ plan late in 2022 in the U.S.