Netflix Will Add Ad-Supported Plans as It Loses Subscribers

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Netflix has had a tough last quarter, and it might be bothersome. The popular video-streaming platform has recorded a loss of 200,000 subscribers in Q1, 2022, which is the first time for Netflix in 10 years. To protect its userbase from any further declines, Netflix is open to the idea of ad-supported subscription plans, and well, will further plan to curb password sharing. Here’s a look at the details.

Netflix’s Plan to Manage Its Declining Userbase

In its latest Q1 earnings report, Netflix has revealed that over 100 million users are sharing their Netflix accounts and this password-sharing problem is one of the causes of the decline in its userbase. To solve this, Netflix will now bring its recent test into full force soon.

If you’ve been keeping up, this test introduced an add-on option for people to add more users to their subscription by paying extra. The feature, which is currently for users in Chile, Costa Rica, and Peru, is a way for Netflix to crack down on password sharing and get more subscribers, considering the people using Netflix for free aren’t really subscribers. The feature will reach more markets in a year.

In the report, Netflix says, “There’s a broad range of engagement when it comes to sharing households from high to occasional viewing. So while we won’t be able to monetize all of it right now, we believe it’s a large short- to mid-term opportunity.

Another way Netflix aims to solve the problem of decreasing subscribers is by introducing cheaper, ad-supported plans soon. While the OTT platform was never up for bringing ads to its streaming platform, it seems like it is now drawn toward the idea for the sake of more subscribers and revenue.

In a recent video interview, Netflix CEO Reed Hastings said, “Those who have followed Netflix know that I’ve been against the complexity of advertising and a big fan of the simplicity of subscription,” Hastings said. “But as much as I’m a fan of that, I’m a bigger fan of consumer choice. Allowing consumers who would like to have a lower price and are advertising tolerant to get what they want makes a lot of sense.

That said, there’s no word on when these ad-supported plans will be introduced and how much will they cost people.

Netflix has other reasons for the declining userbase. It blames the “uptake of connected TVs,” competition like Disney+ and Amazon, data costs, the Russian-Ukraine war, rising inflation, and well, partly COVID-19 as well. And one thing it fails to realize is its rising prices while the competition is tough!

The company plans to sort this issue out with the aforementioned steps while focusing on better content (of, course). And still, the video-streaming platform anticipates a loss of around 2 million subscribers in Q2, 2022. It remains to be seen how well this situation is handled over the coming months. What do you think about Netflix losing subscribers? Do you think it is losing its charm? Share your thoughts in the comments section below.

SOURCE Netflix
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