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Netflix could bring ads to its streaming platform as early as this year, a new report suggests.
A lower-priced tier, supported by advertising, was apparently revealed to employees via an internal memo, the New York Times reports.
The new tier will be introduced in the last three months of 2022, approximately the same time that Netflix plans to begin cracking down on password sharing. Executives said the ad-supported tier would come “in tandem with our broader plans to charge for sharing.”
Netflix had previously said that an estimated 100 million people are watching Netflix using other people’s accounts, which it claimed was holding back its growth.
“If you’ve got a sister that’s living in a different city, you want to share Netflix with her, that’s great,” Greg Peters, Netflix’s chief operating and product officer said.
“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 so she gets the benefit and the value of the service but we also get the value of the revenue associated with that viewing.”
Netflix chief Reed Hastings told investors that the company would try and “figure [an ad-supported platform] out over the next year or two” but development is reportedly happening sooner than expected.
“Yes, it’s fast and ambitious and it will require some trade-offs,” the note said.
“Every major streaming company excluding Apple has or has announced an ad-supported service. For good reason, people want lower-priced options.”
Netflix did not respond to a request for comment from The Independent before time of publication. The streaming service declined to comment to the New York Times.
Netflix said it lost 200,000 subscribers in the first quarter of business in 2022, and expects to lose another two million subscribers in the second quarter. It had expected to gain an additional 25 million subscribers in the first quarter, but its shock shrinkage in subscribers left it with 221.6m customers around the world.