Netflix’s timeline for an ad-tier option (and a clampdown on password sharing) accelerates. – Gold Derby
The Red Envelope might soon become the Sunday circulator.
Okay, that’s a dated reference (though some people do still subscribe to Netflix’s through-the-mail DVD delivery service), but The New York Times has reported that Netflix CEO Reed Hastings’s musings about an ad-supported tier for the top streaming service is one step closer to becoming a reality.
A memo to staff, leaked to the newspaper, said that the company was targeting Q4 of this year to launch a lower-priced, ad-supported option to win new users, or perhaps lure back some of the reported 200,000 who recently quit the service. This loss of subscribers, the first downward turn in the company’s history, was announced as part of the woeful earnings call in April that sank the stock price that resulted in a $70 billion (yes, billion) loss in market capitalization.
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With so many other streaming options, and economic instability due to rising inflation, plus the fact that Disney+ is, at this point, a non-negotiable for anyone with kids, people are definitely tinkering with their monthly subscription budgets.
Moreover, the communiqué also targeted the end of the year “to begin cracking down on password sharing.” Or at least adjust it. In a recent interview, Netflix COO Greg Peters said they would not “shut down” sharing (he used a hypothetical of loaning your password to a sibling in another city) but “we’re going to ask you to pay a bit more to be able to share.” Spotify already does this with their family plan, and it stands to reason that other streaming companies will soon follow suit.
It comes down to this: you wanna watch “Bridgerton,” you gotta pay, even if your ex-roommate’s parents are willing to let you leech. But there will be options if you want to (or need to) be cheap about it and don’t mind ads.
The leaked memo suggests that the company is looking to stop the bleeding immediately. Hastings’s previous remarks were non-committal, suggesting that ads were something they would “figure it out over the next year or two,” not in a matter of months.
How the new advertising initiative will work remains a mystery. Will prices to remain ad-free go up? Will ads interrupt programming, or stick with mainly pre-roll? Will Netflix partner with deep pocket brands for across-the-board product placement? Personally, I’d like to see everyone in “Red Notice 2” and the next season of “The Witcher” eating Cheerios somehow. True crime docs, too!
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May 15, 2022 at 10:20AM