Netflix could introduce ads, crack down on password sharing by end of this year
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Netflix Inc could introduce its lower-priced ad-supported subscription plan by the end of the year, earlier than originally planned, the New York Times reported on Tuesday.
The streaming pioneer is also planning to start cracking down on password sharing among its subscriber base around the same time, the report said, citing an internal note to employees.
As per reports, Netflix executives told employees in a note they were working to introduce the tier by the last three months of 2022.
Netflix founder and co-CEO Reed Hastings had earlier said that the world's biggest subscription-based video streaming service would chart out ad-driven alternatives to the existing plans over the "next year or two." And on that same call, Netflix's COO Greg Peters had said that Netflix would "through a year or so of iterating" on password sharing before it rolled out a plan. But it might happen sooner now.
Two individuals who had access to the internal Netflix note shared it with The New York Times, which reveals that Netflix executives are aiming to launch the ad-supported tier between October and December 2022. It's unclear at this point how Netflix's foray into advertisements will work since it's one of the only ones internationally — between Disney+, HBO Max, Amazon Prime Video, Apple TV+, Hulu, Peacock, and Paramount+ — to offer multiple plans that differentiate across video quality and a number of simultaneous screens, and not content.
In the note accessed by NYT, Netflix executives noted how their American competitors have been able to "maintain strong brands while offering an ad-supported service." Hulu, Peacock, Paramount+, and HBO Max all offer ad-supported tiers in the US at a lower cost than commercial-free plans. Disney+ is set to introduce its own ad-driven tier in late 2022.
In India, Disney+ Hotstar, Voot, Zee5, Eros Now, and SonyLIV already have ad-supported tiers. Netflix acknowledged the US situation in its note: "Every major streaming company excluding Apple has or has announced an ad-supported service. For good reason, people want lower-priced options."
Netflix's plans to crack down on password sharing will also begin around the last three months of 2022, the internal note accessed by NYT said. Peters has already revealed that they are not "trying to shut down [password] sharing, but we're going to ask you to pay a bit more to be able to share."
This allows Netflix members to add "sub accounts" for up to two individuals who don't live with them, at a lower price. Alongside, Netflix also introduced profile transfers in those regions, letting those who were mooching take their watchlist, viewing history, and personalized recommendations to a new account or profile.
