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Netflix plans to offer cheaper ad-supported subscription tiers

·Contributing Reporter
·2-min read
mphillips007 via Getty Images

Netflix might offer cheaper ad-supported plans in the coming years. In the company's most recent earnings call, co-CEO Reed Hastings has revealed that the streaming giant is currently working on the offering and that it will be finalizing details for those plans "over the next year or two." Hastings said he finds ads complex and he's a huge fan of the simplicity of subscriptions, but giving consumers who don't mind watching ads the option to pay less "makes a lot of sense."

And it could make a lot of sense for the company, too. The service lost around 200,000 subscribers in the first quarter of 2022, a development it blamed on stiffer competition, inability to expand in some territories due to technological limitations and account sharing. Apparently, 222 million households are paying for Netflix, but over 100 million more are sharing those accounts.

Back in March, Netflix started testing a feature in Chile, Costa Rica and Peru that allowed subscribers to add two "sub-members," who'll get their own log-ins and profiles, for $3. It may just be a fraction of what a full membership costs, but at least Netflix is getting something from people who'd normally just borrow their friends' accounts.

Hastings clarified during the call that the ad-supported memberships will be added as tiers and members who don't mind paying full subscription fees don't have to be subjected to advertisements. "It is pretty clear that it is working for Hulu, Disney is doing it, HBO did it. We don't have any doubt that it works," he said. The executive also added that Netflix will merely be a publisher and that it will not track user data to match ads like some of its competitors do.

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