In order to recover its subscriber growth, online streaming company Netflix may soon announce more economical streaming plans. According to media sources, such lower-priced bundles will be financed by ads if they are launched, which may be a huge shift for the corporation, which has previously shied away from the ad-supported model.
Netflix lost roughly 200,000 subscribers in the first quarter of 2022, the first time the firm has experienced a drop in a decade. In the current quarter, the business expects a further reduction in the number of subscribers.
In a call with Netflix investors on Tuesday (April 19), Co-Chief Executive Officer Reed Hastings emphasized the possibility for advertising. According to the company’s official estimate, it is possible that it may lose over 2 million subscriptions in the coming quarter.
“Think of us as quite open to us delivering even lower costs with advertising as a consumer choice,” Hastings remarked while revealing the company’s vision for the next year or two.
Hastings continued, “Those who have followed Netflix know that I am opposed to the complexity of advertising and a great supporter of subscription simplicity. But, as much as I support it, I believe that customer choice is far more important. Allowing consumers who desire a lower price and are tolerant of advertising to get what they want makes a lot of sense.”
Hastings also mentioned, “I don’t think there’s any dispute that [the advertising approach] works. I’m confident we’ll just dive in and figure it out, rather than testing it and deciding whether to do it or not.”
Netflix hasn’t come up with a comprehensive plan for its ad-supported model as of yet. As a result, the cost of such a membership has yet to be determined. Having said that, we may have to wait for a few quarters to obtain a clear picture of how Netflix mitigates the negative growth of its userbase.