Netflix looking to introduce a cheaper, ad-driven subscription plan and crack down on password sharing

Netflix is “trying to figure out” how to introduce a cheaper plan that will include adverts, following a sudden drop in subscribers.

The streaming service has always prided itself in being an advert-free haven for film and TV lovers, but it’s said to be contemplating a change in its business model after losing 200,000 subscribers across the first quarter of 2022. It claims that its losses are set to continue, too, as it estimates a further two million accounts being shut down globally in the second quarter, despite the return of hugely popular shows Ozark and Stranger Things.

It had expected to gain 2.5 million subscribers in the first three months of the calendar year, but only managed to reel in 0.5 million – which is significantly down from the four million new users that signed up between January and March in 2021. After it pulled out of Russia, it lost 700,000 users, which all resulted in the company’s first net loss of customers since October 2011.

During a quarterly earnings call with investors, Reed Hastings, CEO, claimed (via Metro (opens in new tab)) that the platform’s diminishing numbers are due to more and more people sharing their passwords. Netflix estimates that outside of its 222 million paying households, it is actually being used in an additional 100 million homes.

Those who piggyback off of other’s accounts needn’t worry too much just yet, though, as Hastings revealed that reducing sharing “wasn’t a high priority to be working on” at this moment in time. That said, the company does have plans to expand a trial program it has been running in Chile, Costa Rica, and Peru, where subscribers can extend their account to another household at a discounted price.

When talking about the prospect of adding an ads-friendly plan, Hastings admitted that while he is against “the complexity of advertising” and prefers “the simplicity of subscription” on a personal level, he is “a bigger fan of consumer choice”.

If you’re still a Netflix subscriber and aren’t sure you’re making the most of the streaming platform then check out our roundup of the best Netflix shows and best Netflix movies for some viewing inspiration.

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