Netflix has reportedly told employees it plans to roll out an ad-supported tier by the end of this year, sooner than expected. Additionally, Netflix’s plan for an extra fee to fight password-sharing would roll out around the same time.
According to the New York Times, Netflix told its employees that after experiencing its first quarterly subscription loss in over a decade, the ad-based tier may arrive sooner than many expected. Last month CEO Reed Hastings said in a post-earnings call that he’s a fan of simple pricing models, but recognizes the company might need to leverage advertising in the future.
“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,” Hastings said. “And allowing consumers who like to have a lower price, and are advertising tolerant, get what they want makes a lot of sense.”
Netflix lost 200,000 subscribers in Q1, with an expected 2 million to be lost in Q2, according to CNN. The initial drop in users led the streaming giant’s stock to dip, as did investors’ concerns. Netflix is still the leader in the marketplace in terms of total subs, totaling roughly 221 million, but this sudden shedding of users is making the company reconsider its current model.
Netflix prices in the US currently range from $9.99 to $19.99 a month.