Streaming giant Netflix recently reported a loss of subscribers for the first time in ten years. Unfortunately, that loss of nearly 200,000 subscribers looks to be just the tip of the iceberg. The company has also forecasted that things could get much worse, leading to even more user hemorrhaging somewhere in the millions in Q2. Because of this, it looks like Netflix will add a lower-priced ad-supported tier to its streaming service.
For many years, Netflix CEO Reed Hastings has talked about why Netflix doesn’t need to compromise its service with an ad-supported tier. However, last month, he changed his tune, and now reports are popping up that say the process to bring this new tier to the struggling service has accelerated. According to sources, this new ad-supported tier of Netflix could arrive by year’s end. The goal would be to launch it sometime in the final three months of 2022. This would be an excellent time to introduce the service tier, as the holiday season does see a massive bump in viewership when compared to the rest of the year.
While its rivals offer ad-supported tiers, Netflix has been stubborn, choosing to continuously bump up its prices. Most recently, the service increased its monthly subscriptions in March 2022. At the moment, its Premium plan will cost $19.99 a month, while its Standard plan will cost $15.49, and its Basic plan comes in at $9.99. These prices don’t bode well when looking toward the competition. The company’s prices have steadily increased over the years and are in stark contrast to the original prices that were introduced in 2014. This doesn’t even put into consideration how much more crowded the streaming services scene has become, with consumers having an overwhelming number of choices.
Regardless of what path Netflix takes, it is sure to alter its customers’ experience. Netflix is in dire need of a new strategy, but will the ad-support tier be too little too late?
Source: The New York Times
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