Netflix’s Ad 5j2i3y ed Plans, Sharing Crackdown to Arrive Before End of 2022: Report

Much sooner than what Netflix had originally claimed. 1a2a1q

By Akhil Arora | Updated: 11 May 2022 11:27 IST

Photo Credit: Akhil Arora/Gadgets 360 3n5v4r

Highlights

Netflix ad tier was to be rolled out over “next year or two”
Plans brought forward as Netflix stock and valuation drop
Netflix’s rivals, in the US and India, already have ad tiers

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Netflix is looking to introduce ments on its platform and will begin cracking down on sharing before the end of 2022, a new report has claimed, citing access to an internal note. That's much quicker than what Netflix founder and co-CEO Reed Hastings had put out just a month ago on the most recent quarterly earnings call. Back then, Hastings had said that the world's biggest subscription-based video streaming service would chart out ad-driven alternatives to the existing plans over the “next year or two.” And on that same call, Netflix's COO Greg Peters had said that Netflix would “through a year or so of iterating” on sharing before it rolled out a plan. But it might happen sooner now.

Two individuals who had access to the internal Netflix note Paramount+ — to offer multiple plans that differentiate across video quality and number of simultaneous screens, and not content. Will there be an ad-ed version of Netflix's Mobile, Basic, Standard, and plans? That seems likely, as it'd allow Netflix to target customers widely.

In the note accessed by NYT, Netflix executives noted how their American competitors have been able to “maintain strong brands while offering an ad-ed service.” Hulu, Peacock, Paramount+, and HBO Max all offer ad-ed tiers in the US at a lower cost than commercial-free plans. Disney+ is set to introduce its own ad-driven tier in late 2022. In India, Apple has or has announced an ad-ed service. For good reason, people want lower-priced options.”

Netflix Hit by Shareholder Lawsuit Over Missed Subscriber Growth Estimates

Netflix's plans to crack down on sharing will also begin around the last three months of 2022, the internal note accessed by NYT said. Peters has already revealed that they are not “trying to shut down [] sharing, but we're going to ask you to pay a bit more to be able to share.” For those wondering how this might work, Netflix has been testing the option for subscribers to pay to share their s outside their household in Chile, Costa Rica, and Peru since March. This allows Netflix to add “sub s” for up to two individuals who don't live with them, at a lower price. Alongside, Netflix also introduced profile transfers in those regions, letting those who were mooching take their watchlist, viewing history, and personalised recommendations to a new or profile.

Fast-tracking both — ad-ed plans, and sharing crackdown — hints at Netflix's desperation to turn the ship around. In April, the streaming service reported its first loss of subscribers in a decade, which deeply impacted its stock price and in turn valuation, and the perception of the video streaming industry as a whole. On its latest quarterly earnings call, Netflix said it estimates there are more than 100 million households that use its offerings but don't pay for it. As of March end, Netflix had over 221.6 million subscribers, though it expects to lose 2 million more by the end of this quarter. With the sooner-than-expected rollout of lower priced tiers and the ability to add more s to existing profiles, Netflix will hope it can add millions more in 2023.

“Yes, it's fast and ambitious and it will require some trade-offs,” Netflix executives said in the note. But will it be enough?

Why are they still making more Harry Potter? We discuss this on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

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