Alan Sawyer
It was just under three weeks ago that we told you Netflix was planning to introduce commercials at some point in the near future.
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Welcome to the near future! Netflix executives said that the company is looking to accelerate that unclear timeline, adding that it is preparing to go-live with an ad-supported tier by the end of 2022.
So, it’s going to be like Hulu, Paramount+, Amazon?
The acceleration of it rumored ad-supported tier was revealed in a memo sent to employees, according to a report this morning by The New York Times (subscription required).
The paper cited two unidentified sources to confirm the report, which also indicated Netflix will follow through with its plans to crack down on password sharing.
Initially many estimated that the company would make the changes sometime during the final quarter of the year but the alleged memo may accelerate that plan, reading, “yes, it’s fast and ambitious and it will require some trade-offs.”
It has been a tumultuous time for the streaming giant as it ended Q1/22 with 221.64 million subscribers, which was down from 221.84 million in Q4/21. The subscriber decline also ushered in a decline in Netflix stock, likely prompting the acceleration of the additional revenue stream and password crackdowns.
Netflix co-CEO Reed Hastings had previously said that he has lone been “against the complexity of advertising and a big fan of the simplicity of subscription,” but acknowledged that ads are “one way to increase the price spread.”
Hastings added that “allowing consumers who would like to have a lower price and are advertising-tolerant get what they want makes a lot of sense.”
Again, it is a direct decision do compete with the free version of Hulu as well as a move that mirrors what other streaming options allow, whether Amazon or Paramount+.
