Netflix to launch ad-supported tier when it cracks down on password sharing

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in General Discussion
Netflix is reportedly planning on launching a cheaper ad-supported tier in late 2022, around the same time as it begins cracking down on password sharing.

Netflix logo
Netflix logo


The streaming giant told employees of the planned changes in an internal letter obtained by The New York Times. Although the company informed employees of the changes, it didn't offer many details about them.

During its last earnings call, Netflix CEO Reed Hastings said the company would take time to roll out an ad-based tier, stating that it would "figure it out over the next year or two."

However, in its internal letter, the company appears to have accelerated that timeframe, stating that the planned changes will be "fast and ambitious" and could "require some trade-offs." Netflix pointed out that "every major streaming company excluding Apple has or has announced an ad-supported service" -- adding that consumers want "lower-priced options."

Netflix has been bleeding subscribers in recent quarters. In the first quarter of 2022, for example, it lost 200,000 subscribers -- its first loss in more than a decade. It also expects to lose two million in the current quarter.

Although Netflix recently hiked prices across its various subscriptions, it has partly blamed the subscriber loss to password sharing.

The company plans on deploying measures to crack down on the practice later in 2022. In the internal letter, Netflix characterized the clampdowns as allowing users to "easily and securely" share their passwords at the cost of "paying a bit more."

Netflix said it would test those changes in specific regions, but didn't make it clear when it would roll them out more broadly. However, Netflix told employees that those mechanisms would debut "around the same time" as its ad-supported tier.

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Comments

  • Reply 1 of 35
    rob53rob53 Posts: 2,982member
    Good. Final reason to dump it. 
    lolliverrumpelswatto_cobra
  • Reply 2 of 35
    SpitbathSpitbath Posts: 42member
    What I want to know is this... When watching a show on ad-free Hulu, one can tell where the commercials would be placed by a half second pause where the screen goes black. If commercials weren't a thing it would seem like bad editing. Netflix shows generally do not have these brief pauses, which makes some of their shows feel more cinematic or similar to an HBO show. I would even argue that it elevates the quality of a show. So... Would a commercial based Netflix plan just start playing ads at random? Would it be like how a YouTube video gets suddenly interrupted at the most inconvenient mid-sentence interval? Will Netflix start adding brief pauses to future programming?
    lolliverSpaceGrayAllDaywatto_cobra
  • Reply 3 of 35
    BeatsBeats Posts: 3,073member
    There’s a huge window for Apple to take share but I have a feeling they won’t take advantage of it. 
    anantksundaram
  • Reply 4 of 35
    amar99amar99 Posts: 126member
    "adding that consumers want lower-priced options"
    To think some marketing dude at Neflix got paid for this type of expert opinion.
    The higher their price goes, the less often I even subscribe for 1 month and then cancel.
    JaiOh81rumpelswatto_cobra
  • Reply 5 of 35
    chadbagchadbag Posts: 1,688member
    Netflix had lived in an echo chamber so long that I think they have convinced themselves of what their problems are but in reality they have no real clue.  (Or maybe they really do know what the problems are but are in denial).  
    lolliverRudeBoyRudywatto_cobra
  • Reply 6 of 35
    M68000M68000 Posts: 457member
    Beats said:
    There’s a huge window for Apple to take share but I have a feeling they won’t take advantage of it. 
    But it is really consumers who decide, regardless of what Apple does.
    dewmewatto_cobra
  • Reply 7 of 35
    M68000M68000 Posts: 457member
    rob53 said:
    Good. Final reason to dump it. 
    I don’t have Netflix but like the ad supported Hulu.  It gives time to get up and go to fridge or even learn something about a product or service.  We’ve had ads since the early days of TV,  no big deal.
    RudeBoyRudywatto_cobra
  • Reply 8 of 35
    aderutteraderutter Posts: 534member
    It’s crazy that they don’t realize the madness of demanding a user with only one device, albeit a 4K device, pay their top-tier price regardless of how much they use the service.

    Another big problem is they think having a big catalogue of irrelevant content is more valuable than a small catalogue of higher quality titles. 

    I will never subscribe to a service that has ads, one pays to avoid ads.
    lolliverrumpelswatto_cobra
  • Reply 9 of 35
    JapheyJaphey Posts: 1,384member
    I think they’re being extremely conservative in projecting only 2 million cancelled subscriptions. It’s been 3 weeks since they made that prediction, and while most news stories would have been forgotten by now, Netflix’s troubles are still plastered everywhere I go online. I think the effect of this will be a hive mentality with a lot more people reevaluating the importance (need) of Netflix in their homes. That number will almost certainly be much higher. 

    While it was annoying that Ozark and Stranger Things were broken in half into 2 separate releases, that move was also brilliantly greedy. It caused many subscribers (like me) to stick around an extra month or 2. I’m sure that July 1st is highlighted on every calendar they have, because once Stranger Things finishes season 4, the floodgates will open. Guaranteed. 
    edited May 10 lolliverJaiOh81watto_cobra
  • Reply 10 of 35
    jimh2jimh2 Posts: 425member
    rob53 said:
    Good. Final reason to dump it. 
    Is that an admission you are sharing login credentials and do not want to pay full price?
  • Reply 11 of 35
    bsnjonbsnjon Posts: 39member
    The Ad-free experience has been core to Netflix from the beginning. It seems a strange business strategy to become more like Hulu exactly at the moment customers are trying to differentiate between streaming options. Ad agencies are putting out rainbows of huge payouts but this is a large risk. It seems to me another example of activist investors potentially ruining businesses. 
    lolliverwatto_cobra
  • Reply 12 of 35
    ATV+ is killing it at the moment. So much high quality content. 

    Pachinko is top quality! Severance is amazing! 


    Incoming Season 2: Physical, For All Mankind

    Incoming Season 3: Ted Lazzo, The Morning Show


    I'm leaving  lots out (movies, docs), but overall ATV+ is superb! 
    lolliverlkruppStrangeDaysgilly33watto_cobra
  • Reply 13 of 35
    JP234JP234 Posts: 74member
    I enjoy a lot of the programming on Netflix, and I'm willing to pay for it. Does that make me a sucker? Y'all think everyone should get the whole enchilada for free. I have Apple TV+, and pay their very reasonable charge. Even though they don't have 1% of Netfilx titles, the AVERAGE quality of the programming, from cast, crew, photography, production values, etc. is a quantum level above that of Netflix, or Prime, or even HBO Max. "Foundation" on our new Samsung TV, through the Apple TV 4K box, using the Sony WH-1000XM4 headphones was a revelation!
    edited May 10 lolliverbsnjonMac4macwatto_cobra
  • Reply 14 of 35
    amar99amar99 Posts: 126member
    "Y'all think everyone should get the whole enchilada for free"...hmm...well the point of the article was the fact that Netflix is making a way for people to watch for free, so that's on them. Nobody here has a problem paying for Netflix, just not their ever-increasing premium for sub-par content.
    lolliverJP234watto_cobra
  • Reply 15 of 35
    mac_dogmac_dog Posts: 979member
    And not one word about their shitty content. Bring better content and you can justify raising your monthly rate. I’m not surprised members are leaving. I’m that close myself. 
    lolliverrumpelsStrangeDaysMac4macwatto_cobra
  • Reply 16 of 35
    rumpelsrumpels Posts: 27member
    Programming with ads should be free. It has been. Keep it free. Cancel Netflix. There’s free programming with ads in other apps. It’s ridiculous to now have to pay any kind of amount AND also have to watch ads. Cancel Netflix, Disney+ and ANY other service that makes you pay AND also watch ads. Having to pay to watch ads is a slap on consumer’s faces. I cancelled mine and I don’t miss it. And I’ve never shared my Netflix passwords, that’s a lame excuse from Netflix just to justify being greedy.
    I can’t tell others what to do. But I encourage everyone to cancel Netflix and any provider that plans to charge or charges for having you watch ads. 
    sandorwatto_cobra
  • Reply 17 of 35
    digitoldigitol Posts: 268member
    Netfux moves to eliminate sharing, while Apple TV+  and  paramount plus promote sharing. 

    edited May 11 watto_cobra
  • Reply 18 of 35
    entropysentropys Posts: 3,494member
    Rumpels, I will end it when Netflix starts inserting ads in shows.  Not before. They need to see the consequence. If I did it now they would not.
    rumpelswatto_cobra
  • Reply 19 of 35
    dewmedewme Posts: 4,297member
    I will pay whatever it takes to make the commercials go away. Regular commercials are one thing, but the absolute horror that we are subjected to leading up to any kind of an election cycle is pure torture. There should be a Geneva Convention article outlawing this form of human torture. Muting doesn’t go far enough, I now need parts of my memory selectively and permanently erased.

    I do agree with those who see Apple’s TV+ as being a step above the rest of the streaming pack in terms of quality. The only minor complaint I have about most of what I feel is the better quality content on Apple TV+, and even on some of the other streaming providers, is that too much of the content is series based. Depending on the storyline and genre, these series could literally go on forever.

    If you’re a TV or video watching fanatic, or the subscription provider, I suppose the series format is nirvana. But if you don’t want to sign-up your future TV viewing self for an endless number of never ending series, it’s too much of a commitment. I often skip over content that I see is labeled as “Series 1 Episode 1 …” when I’m just looking for something to watch right now. Just looking for a more balanced mix, but it is totally understandable why the subscription providers want to push the series format to keep you plugged-in and paying - forever.  
    JP234
  • Reply 20 of 35
    asdasdasdasd Posts: 5,685member
    rumpels said:
    Programming with ads should be free. It has been. Keep it free. Cancel Netflix. There’s free programming with ads in other apps. It’s ridiculous to now have to pay any kind of amount AND also have to watch ads. Cancel Netflix, Disney+ and ANY other service that makes you pay AND also watch ads. Having to pay to watch ads is a slap on consumer’s faces. I cancelled mine and I don’t miss it. And I’ve never shared my Netflix passwords, that’s a lame excuse from Netflix just to justify being greedy.
    I can’t tell others what to do. But I encourage everyone to cancel Netflix and any provider that plans to charge or charges for having you watch ads. 
    We don't know if the ad tier costs anything yet. If not then a lot of people will use it. On a smaller price they will also attract people. 

    Don't expect the ads to be run at the frequency of American network TV. That is not the world norm. Two short breaks in an hour is more normal. 
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