Netflix will be introducing a cheaper plan with ads but will keep the ad-free version for its current subscribers. The move was announced after the streaming giant lost 200 000 subscribers in the first quarter of the year. They projected losing another 2 million in the second quarter, which is a terrible outlook for the company.
Netflix cited 4 causes of the loss, but the focus is on two; password sharing and growing competition.
“Our relatively high household penetration — when including the large number of households sharing accounts — combined with competition, is creating revenue growth headwinds,” – Management letter to shareholders, Sydney Morning Herald
According to CEO, Reed Hastings, with the prevalence of password sharing, Netflix has an estimated 100 million consumers worldwide that have been streaming for free. They need to find a way to get these consumers to pay and one of the ways is to introduce cheaper plans with ads.
“If you still want the ad-free option, you’ll be able to have that as a consumer, and if you would rather pay a lower price and you’re ad-tolerant, we’re going to cater to you also.” – Hastings as reported by Protocol
Elon Musk jumped in on the issue, saying that the reason why Netflix is suffering is because of the “woke virus”.
This is perhaps a jibe at Netflix’s woke content like He’s Expecting, a show about a man getting pregnant. Woke content refers to any content that pays attention to social justice causes, racism and gender spectrum inclusivity. This show is one of them, where a man goes through pregnancy while juggling his career and social life.
Netizens had mixed sentiments about Netflix’s announcement. Some said that it is a good option for those who are willing to tolerate the ads for a cheaper price plan.
And then there are those who clearly didn’t read what Netflix actually said.
There is truth in what he says, people pay to watch their shows ad-free.
Hastings cited the success of Hulu, another streaming platform’s dual subscription model as proof that it works. Hulu’s paying subscribers increased to 40.9 million in 2021 from 35.4 million in 2020. Hulu offers a cheaper subscription tier with ads as an option for their consumers as well as an ad-free version.
As of now, there is no definite date as to when Netflix will roll out the ad inclusive subscription tier but they are headed towards that.
Reporter’s Opinions: People really don’t read nowadays ah? You can keep your ad-free subscription, they’re just introducing a new lower tier plan for people who are willing to watch the ads.
Yeah, this tweet did not age well.
Amazon Prime already introduced ads in their streaming services but you can skip it. Most of their ads are for shows that’s being offered by the platform itself.
Netflix should look into its content instead. There are good shows that were cancelled for no reason and there are other shows like Riverdale, Sabrina, Stranger Things, Money Heist, etc that’s renewed despite the draggy, nonsense storylines.
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