Netflix is considering adding a lower-priced ad-supported tier to its platform after losing 200,000 subscribers in the first three months of 2022.
According to The New York Times, the streaming service told employees about the addition in a recent email, though Netflix CEO Reed Hastings first announced the company was open to adding commercials to the service back in April.
"Those who have followed Netflix know that I've been against the complexity of advertising and a big fan of the simplicity of subscription. But as much as I'm a fan of that, I'm a bigger fan of consumer choice," Hastings said on the post-earnings call last month.
"And allowing consumers who like to have a lower price, and are advertising tolerant, get what they want makes a lot of sense,” he added.
Netflix previously attributed the major loss in subscribers to slower service on smart TVs, password sharing and increased competition. It appears that the attempt to have a cheaper ad-supported tier is a way for the company to still make some revenue back, but also give users a cheaper option for using the service, which has seen price increases over the years.
In the Tuesday note to employees, Netflix explained that competitors like HBO and Hulu have been able to “maintain strong brands while offering an ad-supported service.”
“Every major streaming company excluding Apple has or has announced an ad-supported service,” the note added. “For good reason, people want lower-priced options.”
Netflix was also previously reported to be considering cracking down on the ability to share passwords between multiple households.
