Netflix launches a cheaper ad-supported tier to win back customers (Credit: Getty)
If you are one of the millions of people who leave Netflix to save money, the company wants you back.
To do this, it is going to launch a cheaper plan that offsets the cost by showing you ads.
Unfortunately, a Netflix executive has confirmed that this cheaper tier doesn’t have access to everything.
During an earnings call, co-CEO Ted Sarandos said that if Netflix’s ad tier launched today, it would contain the “vast majority” of its content.
He went on to explain that Netflix is currently talking to studios to bring additional content to the cheap seats, but “certainly not everything.”
Of course the move makes sense. Netflix will probably want to withhold some of the cheapest tier stuff to convince viewers to upgrade and pay more.
It’s not clear exactly what restrictions Netflix will put in place in 2023 when this new tier arrives. But the company is certainly optimistic about the outlook for streaming in general.
“Looking ahead, streaming works everywhere,” said co-CEO Reed Hastings.
“Everyone is pouring in. It’s definitely the end of linear TV in the next five/ten years, so very optimistic about streaming.”
The streaming company has always kept marketing out of its platform, relying instead on increasing subscription fees to manage its growth.
Netflix originals like Stranger Things will hopefully be included in the cheapest tier. (Credit: Netflix)
But Netflix has had a difficult year. After reports of a loss of subscribers, the company’s stock price plummeted.
So it makes sense that it is are turning to advertising to fund a cheaper subscription tier to lure people back.
“Netflix should show ads that are relevant to the show or movie they’re showing,” said Kai Henniges, video ad expert.
“It’s also critical that Netflix sets and maintains standards regarding the quality and aesthetics of their ads so that they enrich, not diminish, the user experience.”
The company said it lost 200,000 subscribers in the first quarter, less than its forecast of 2.5 million subscribers. The suspension of service in Russia after the invasion of Ukraine has also cost Netflix 700,000 members.
The loss of subscribers could be due to the end of the pandemic-fueled streaming boom, as households stopped video subscriptions in record numbers at the start of the year.
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