In the first quarter of 2022, Netflix lost 200,000 users. Over a decade, they have not shown such a significant decrease, and according to some reports by the end of this year, this number may reach about two million.
This is why the series and movie platform want to enter the market with an exciting option. The directors are looking to cater to people who feel the price of Netflix is too high.
To get closer to this part, they have planned a new type of subscription plan. It’s the same content but pays less with ads. Something similar to what streaming giants like YouTube and Spotify do with their free plans.
According to reports from The Wall Street Journal, to do this, Netflix will join other advertising giants who will help run it on its platform. Roku, NBCUniversal, and Google will be the three selected partners.
“We’ve left a huge cross-section of customers off the table, and they’re the people who say, ‘Hey, Netflix is too expensive for me and I don’t care about advertising. We are adding a new level with ads. We do not add ads to Netflix as we know it today. Netflix co-CEO Ted Sarandos explained that we’re adding a level with ads for people who say, “Hey, I want a lower price and I’ll see the ads.”
How will it work?
The new type of plan will go into effect at the end of 2022. However, the platform has been cautious with the details it provides about it.
According to some reports, the price can be half the standard plan.
In terms of the resolution it will deal with, it is not yet known for certain what it will be, however, TV experts assure that Netflix will be putting together a basic genre. 480p is the type that is usually used in the streaming world for the cheapest subscriptions.
Since the first-quarter losses became known, the platform has taken immediate action to restore users and profits. The first was the firing of 300 workers in the company. Ted Sarandos calmed shareholders weeks later by declaring that this was bad timing for all streaming companies.
“We’ve had experiences where the market has been decoupled from our core business and you have to prove that it still works and will continue to work in the long run. There is a lot of uncertainty in the world today, and if something happens that shakes the foundation of the narrative, they get nervous.”
Another measure that did not work well among users is that Netflix decided to follow the shared accounts. According to data from the platform itself, at least 222 million people share their Netflix credentials with another hundred million who are not paying. The company believes that eliminating this factor, along with ad-supported subscriptions, will make it more profitable again.