Netflix Considering Lower Cost Ad-Supported Subscriptions

Netflix co-CEO Reed Hastings has revealed that the streamer is open to the possibility of lower-cost, ad-supported subscriptions to help boost the company’s growth.

The news came during Netflix’s Q1 earnings interview, where Hastings revealed that the company is hoping to nail down its strategy for ad-supported streaming over the next year or two. “But think of us as quite open to us offering even lower prices with advertising as a consumer choice,” he said.

For years, Netflix has been adamant about sticking to subscription-only plans; however, subscriptions have begun to slow in recent times. In fact, according to Variety, the streamer lost 200,000 subs in the first three months of 2022 and expects to drop 2 million in Q2. The ad-supported options would be a way to rebuild and grow the company.

“Those that have followed Netflix know that I’ve been against the complexity of advertising and a big fan of the simplicity of subscription,” Hastings explained. “But as much as I’m a fan of that, I’m a bigger fan of consumer choice. And allowing consumers who would like to have a lower price and are advertising-tolerant get what they want, makes a lot of sense.”

Many of the other major streaming services provide cheaper, ad-supported plans, including HBO Max, Hulu, and Paramount+. And Disney+ is expected to launch an ad-supported plan in the U.S. later this year.

“I don’t think we have a lot of doubt that [the ad model] works,” Hastings continued, referencing Hulu and HBO Max and the upcoming Disney+ plans. “I’m sure we’ll just get in and figure it out — as opposed to test it and maybe do it or not do it.”

Related

Rob Lowe and His Son to Star in Netflix Comedy 'Unstable'

Hastings also hopes the new model will go some way in helping quell password sharing. Netflix currently touts a subscriber base of 220 million, but around a 100 million of those use other people’s passwords to log in.

“I know it’s disappointing for investors [but] we are really geared up. This is our time to shine. This is our time to get back into investors’ good graces,” he said.