Netflix may roll out ad-supported plan by end of 2022

After years of refuting the possibility of commercials on the streaming platform, Netflix could roll out its lower-priced ad-supported subscription plan by the end of the year, ahead of the time originally specified, The New York Times reported. 

Citing an internal employee note, the report said that the streaming giant is also planning a crackdown on password sharing among its subscriber base. 

Netflix admitted in its earnings call that it is struggling with password sharing by its consumers. 

Netflix had always shot down the idea of ads to its platform, even after being asked repeatedly over the years. At 2017 conference, Reed Hastings, Netflix’s co-founder, said that the company is not well suited to compete with those including Facebook and Google on ads.  

Also read: Password sharing hits streaming platforms revenue

In the, latest quester earnings call, Hastings said that the introduction of ad-supported tier would be big shift in thinking of the company that has originally been “against the complexity of advertising and a big fan of the simplicity of subscription.” 

The company mentioned in its Q1 earnings report that in a first time in 10 years, it lost 200,000 subscribers in the first three months of the year and anticipate losing another two million in the following months. 

Netflix’s shares plummeted sharply post the subscriber announcement which eroded around $70 billion in the company’s market capitalisation. 

Netflix’s arch rivals in terms of competition are from firms such as Amazon, Apple and Disney, which are pumping money into their streaming services according to reports. 

Disney has since long been delivering ad-supported tier on several of its services, including Hotstar, its Asia based streamer. In March this year, Disney said that it is looking at launching an ad-support Disney+ plan in the US towards the end of this year.

Amazon got into the bandwagon of ad-supported streaming market three years back with IMDb TV which is recently being named as Freevee.

Netflix had popularised its brand by providing a better, ad-free experience to its user base. Introduction of ads is a massive move for the streaming giant, indicating just how much the competition is aggravating.