Netflix is planning to launch a lower-cost, ad-supported membership option and begin cracking down on password sharing by the end of the year.
In a note to employees that was communicated to The New York Times, the streaming giant indicated that the tier would be introduced in the last three months of 2022. This would be earlier than the rough “over the next year or two” period that Netflix CEO Reed Hastings had floated around last month.
The note acknowledged as much, stating “Yes, it’s fast and ambitious and it will require some trade-offs.” It’s unclear exactly what those “trade-offs” will be, however.
Until as recently as March, Netflix has historically said it’s not interested in bringing ads to its platform. However, its stance changed amid confirmation that it actually lost 200,000 subscribers in Q1 2022 — its first quarterly drop in over 10 years. Further, the company is expecting to shed another two million subscribers in the second quarter. All of this comes amid an increasingly saturated streaming market, which includes relatively new players like Disney+, Apple TV+ and the U.S.-only HBO Max.
Less clear, however, is what’s happening with the password sharing crackdown. The company has previously confirmed plans to crack down on password sharing, as the company claims that around 100 million households are doing so instead of paying for their own memberships. However, it’s so far only rolled out a test of a password sharing paywall in three countries: Chile, Costa Rica and Peru, so it’s unclear how it might work when it officially launches.
The New York Times‘ report didn’t provide any further details, simply noting that Netflix is “planning to begin cracking down on password sharing among its subscriber base around the same time.” Therefore, this leaves some room as to when and how Netflix will crack down on this, specifically.
Source: The New York Times