Netflix may introduce a lower-priced ad-supported tier by the end of the year, a much quicker timeline than originally expected, according to a new report.
Netflix delivered the news to employees in a memo, which said they were aiming to introduce ads in the final three months of the year, The New York Times reported Monday. The company added that it will likely begin cracking down on password sharing among subscribers around the same time.
Since the subscriber announcement in April, Netflix’s share price has gone into freefall, erasing roughly $70 billion in the company’s market capitalization. The company cited the pulling out of Russia, as well as the waning of the pandemic, which supercharged Netflix’s subscriber base.
Netflix is also losing customers to competitors such as Disney, Warner Bros. Discovery, Paramount Global, NBCUniversal, and Apple TV+.
Hastings told investors recently that it would look into the possibility of introducing an ad-supported platform like some of its rivals and that it would try to “figure it out over the next year or two.”
The recent note to staff signaled that the timeline has sped up.
“Yes, it’s fast and ambitious and it will require some trade-offs,” the note said.
The Los Gatos, Calif.-based streaming giant currently offers a host of payment tiers, including its most popular plan, which costs $15.49 a month. The new ad-supported tier will cost less. Other streaming providers have similar plans and ad-suported offerings. HBO Max, for example, offers an ad-free service for $15 a month, and it charges $10 a month for the service with commercials.