Netflix could be set to introduce adverts for certain subscribers as early as this year, if reports are to be believed.
It’s no secret that Netflix has been toying with the idea of offering some subscriptions that cost less money and contain advertising, but according to the New York Times, employees have been told that the lower-priced tier for subscribers could be in action as early as the final three months of 2022.
The company recently released financial reports that were not wholly positive, and they’ve been losing subscribers at an alarming rate.
In fact, over a period of time that it had estimated adding 2.5 million subscribers, it ended up down 200,000.
That’s partially due to the situation in Russia and Ukraine, but also potentially because of account sharing and a number of other factors.
Now, it is exploring a number of options.
In a shareholder press release, the company’s executives said: "Our revenue growth has slowed considerably as our results and forecast below show.
"Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally. However, our relatively high household penetration – when including the large number of households sharing accounts – combined with competition, is creating revenue growth headwinds.
"The big COVID boost to streaming obscured the picture until recently. While we work to reaccelerate our revenue growth – through improvements to our service and more effective monetization of multi-household sharing – we'll be holding our operating margin at around 20%."
In April, Netflix CEO Reed Hastings told The Hollywood Reporter that the company could introduce the lower-tier subscription in order to allow those who don’t mind advertising to pay less for their subscription in exchange for seeing commercial messages.
Hastings has previously said he’s ‘against the complexity of advertising, and a big fan of the simplicity of subscription’.
He continued: "But as much as I am a fan of that, I am a bigger fan of consumer choice.
“And allowing consumers who would like to have a lower price, and are advertising-tolerant, get what they want, makes a lot of sense.
"Think of us as quite open to offering even lower prices with advertising as a consumer choice."
At the time, he said that the changes could happen ‘over the next year or two’ but it's clearly dead set on the plan as Netflix COO Greg Peters has also described the possibility of introducing ads as ‘an exciting opportunity for us’.
Hastings admitted that he’s taken inspiration for the idea from other streaming platforms tiered subscriptions, stating that it is ‘pretty clear’ that it can work.
"We don’t have any doubt that it works,” he said.
He added: "In terms of the profit potential, definitely the online ad market has advanced, and now you don’t have to incorporate all the information about people that you used to. “We can stay out of that, and really be focused on our members, creating that great experience."
LADbible has contacted Netflix for a comment.
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