Last month, Netflix announced it would be piloting an additional fee for users who share their accounts and passwords with different users. The test will soon be launched in Chile, Costa Rica and Peru.
Netflix CEO Reed Hastings, on the other hand, has told a number of investors and analysts that the platform will be open to exploring potential ad-based viewing plans where it will be cheaper for users to subscribe. This is Netflix's effort to reach more new users.
This statement comes after Netflix revealed its earnings in the first quarter of 2022, where it lost more than 200,000 users for the first time in more than a decade.
Hastings told analysts that the current market has made Netflix rethink its strategy and how it wants its users to use the platform.
He expressed no preference for the complexity of advertising over the simplicity of subscriptions. But he realized that Netflix had already reached such a large number of household users in its target audience that Netflix needed to make some changes.
So Netflix also plans to provide cheap subscription packages that are supported by ads. But at this point the plan is not ready, and Hastings stated that it will take up to two years to make it happen.
It remains to be seen also whether users will be interested in watching ads even after paying a subscription fee to the platform.
Another thing to consider is how intrusive the ads are for Netflix. Will users experience ad breaks while watching shows or movies, or will Netflix include those in the UI as well? Then whether there will be a skip button after a certain period of time as is the case on YouTube as reported by us from Gizmochina.
