Netflix Will Introduce Cheap Subscription Packages With Ads Later This Year

Netflix, prepare a subscription package but there are still ads. (photo: Unsplash)

JAKARTA - Netflix will accelerate the launch of low-priced subscription packages containing advertisements by the end of this year. The move was earlier than the US Californian company had planned.

Netflix made the announcement to its employees recently. In the note, Netflix executives stated that they aim to introduce an advertising subscription plan in the last three months of the year.

The Video on-Demand (VoD) service also plans to start cracking down on password sharing among its subscriber base around the same time, making it harder to grow. Unfortunately, Netflix was reluctant to respond regarding the record.

The company last month recorded the loss of most of its customers in more than a decade and hinted at deeper losses ahead. This change has benefited greatly from the boom recorded during the pandemic.

Slow subscriber growth prompted Netflix to consider and offer a lower-priced version of the service with ads, after years of publicly stating that ads would never be seen on their streaming platform.

This was done by Netflix after reflecting on the success of similar offerings from rivals HBO Max and Disney+. However, Netflix faces significant business challenges.

As of last month's first-quarter earnings announcement, Netflix had lost 200,000 subscribers in the first three months of the year. This is the first time this has happened in a decade and is expected to lose another two million in the months to come.

Since the announcement of the subscriber drop, Netflix's stock price has fallen sharply, wiping out roughly $70 billion in the company's market cap.

Netflix's Chief Executive, Reed Hastings, in an April earnings call revealed that the company will figure out (the plan) over the next year or two to get back to growth.