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Netflix Ads To Come As Early As End Of 2022, May Also Take On Shared Accounts

Netflix Ads To Come As Early As End Of 2022, May Also Take On Shared Accounts

While the company has decided to potentially lower the subscription costs it is also considering introducing ads.

In April, Netflix revealed that it lost subscribers for the first time in more than a decade. The company also predicted deeper losses ahead. Netflix CEO Reed Hastings had stated at the time: "Those who have followed Netflix know that I've been against the complexity of advertising, and a big fan of the simplicity of subscription. But, as much as I'm a fan of that, I'm a bigger fan of consumer choice."

The company attributed the drop in subscribers to the increase in completion, a sluggish economy, but also to account sharing. The streamer is now determined to extract revenue from the 100 million households watching Netflix through shared accounts.



 

While the company has decided to potentially lower the subscription costs it is also considering introducing ads. The company intimated its employees recently about introducing ads on the streaming site by the end of the year. "Yes, it’s fast and ambitious and it will require some trade-offs," the note said referring to speeding up the process of bringing in ads, as per a report from The New York Times. "Every major streaming company excluding Apple has or has announced an ad-supported service,” the note went on to say. “For good reason, people want lower-priced options."



 

The decision to introduce ads on Netflix was supported by the fact that HBO and Hulu have ads as well and have been able to “maintain strong brands while offering an ad-supported service.” But the company has in the past stated that it would never bring commercials on its platforms. 

Netflix had earlier reported that it lost 200,000 subscribers in its first quarter against its forecast of adding 2.5 million subscribers. It lost 700,000 members after suspending service in Russia after the Ukraine invasion as well. The company's stock also plummeted last month, eliminating nearly $70 billion in market capitalization. Currently, the most popular plan costs $15.49 a month. If ads roll in, the prices will fall further. Currently, HBO Max offers a commercial-free service for $15 a month and $10 a month for the service with advertising.



 

Greg Peters, Netflix’s chief operating officer also announced last year how they will take on the shared accounts as well. Peters explained, "So if you’ve got a sister, let’s say, that’s living in a different city — you want to share Netflix with her, that’s great. We’re not trying to shut down that sharing, but we’re going to ask you to pay a bit more to be able to share with her." 

In the note to employees, Netflix executives said the advertising-supported tier would be introduced “in tandem with our broader plans to charge for sharing.”

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