Netflix co-CEO, Ted Sarandos, confirmed that the streaming giant is working on adding a new ad-supported tier in a bid to increase its subscriber base. Ted said in an interview; We’ve left a big customer segment off the table, which is people who say: “Hey, Netflix is too expensive for me and I don’t mind advertising’ The upcoming ad-supported tier will cater to individuals who say, ‘Hey, I want a lower price and I’ll watch ads.”
Ad-supported tier to feature the same quality as basic plan
Netflix offers three types of subscription plans to its customers with different streaming qualities, namely; Basic Plan, Standard Plan, and the most expensive Premium Plan. The Basic Netflix plan is priced at $9.99 offering 480p streaming, the Standard plan is priced at $15.49 for a 1080p resolution, while the premium plan, is priced at $19.99 per month, which offers 4K HDR streaming. Netflix’s ad-supported tier would presumably offer streaming quality similar to the Basic plan.
Netflix exec also confirmed that the video streaming giant is in talks with ad partners, although he didn’t name names. However, an international news outlet recently claimed Google and NBCUniversal are the top contenders to help Netflix build the ads-included plan. Sources further claimed that the USA is going to be one of the top priorities to launch an ad-supported tier, considering it is the hub of Netflix and it is also expected to boast a huge user base.
Netflix is doubling down on password sharing
For the first time in 10 years, Netflix reported a decline in subscriber growth in its first-quarter earnings of 2022. The company blamed it on increasing competition and a large number of households sharing accounts. According to Netflix’s estimates, 222 million paying households are sharing passwords with an additional 100 million households that are not being monetized. To address the issue, Netflix has started a crackdown on password-sharing households, the streaming giant wrote in a letter to shareholders; “Our relatively high household penetration – when including the large number of households sharing accounts – combined with competition, is creating revenue growth headwinds.”