For the first time in 10 years, Netflix, the leading online content streaming service, lost 200,000 subscribers globally. But this is only for the first quarter of 2002. The company is estimated to lose 2 million more subscribers in the second quarter. Therefore, to protect its declining userbase, Netflix is working to introduce Ad-supported subscription plans.
There are two reasons for the loss of Netflix subscribers. The first reason is the increased price of the subscription plans. And the second reason is the Netflix password sharing feature. According to Netflix, almost 100 million households share their account passwords with others. Apart from the increasing competition, this is the main roadblock to the growth of Netflix.
This is why the company is ready to offer low-priced tiers with ad-supported plans. Besides password sharing, increasing rival platforms, slow-moving economic growth, and a growing inflation rate are also the main factors for the loss of the Netflix user base. Moreover, the suspension of service in Russia due to the recent conflicts added more damage.
Netflix might launch cheaper ad-supported streaming plans
If you’ve been using Netflix for a long time, you should know that the platform is strictly against advertisements. According to Netflix CEO Reed Hastings, the platform was consistent in not offering any ad-supported plans. Whatever Netflix subscription plan you choose, whether it is a mobile, basic, standard, or premium plan, you’ll never see an Ad interruption while watching movies or web series.
Unfortunately, this era is finally coming to an end. Yesterday, the company revealed the overall quarterly earnings with an update to introduce cheaper ad-supported subscription plans. Netflix expects these advertisement plans as an option for a new pathway to growth and revenue. However, Hastings didn’t provide details on when Netflix’s ad-supported plans will be launched and how much they will cost.
Netflix competitors such as Disney+, Hulu, Paramount+, and Peacock offer TV-style ad breaks between video streaming content. For the first time, Netflix is following in its rivals’ footsteps. Moreover, Hastings added that these ad-supported subscription plans would be of low costs than usual. But it is still difficult to digest that Netflix will also cause interruption like others. But, yeah, we have to get used to it. What other choice do we have?
A lower-tier option that includes commercials might make some price-conscious users stay with the service. Moreover, it will also provide Netflix with a different source of income. What are your thoughts about Netflix losing subscribers? Do you think including ads is a good move? Do let us know in the comments section below.