The video-streaming giant, Netflix, has partnered with Microsoft to provide consumers with an ad-supported subscription plan. The announcement came following the loss of 200,000 users in the first quarter of 2022. Read along to know more about the Netflix ad-supported subscription plan.
Netflix Ad-Supported Subscription Plan:
Netflix’s subscription base declined from 221.8 million to 221.6 million in the first quarter of 2022. The company has further forecasted a 2 million loss of global paid subscribers in the second quarter.
According to Netflix, the loss was mostly due to the suspension of its service in Russia after the country invaded Ukraine. It resulted in a loss of 700,000 customers. The attack might also have had a broader impact, as Netflix reported a slowdown in its operations in Central and Eastern Europe in March, which corresponded with the commencement of the conflict.
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Password sharing of one account to many could be another reason for the loss of subscribers. To address that, the streaming platform recently began testing a feature that would require members to pay an additional fee if they share their account with anyone other than their own family.
Netflix’s share price decreased more than 20% after the company announced that it actually lost ground in terms of subscribers. Responding to that Netflix’s CEO Reed Hastings said that “I know it’s disappointing for investors”.
So, to make up for the loss, Netflix will soon be announcing a lower-priced plan with ads. Hastings said, “I am a bigger fan of consumer choice. And allowing consumers who would like to have a lower price, and are advertising-tolerant, get what they want, makes a lot of sense”.
Netflix has long been averse to the complexity of advertisements on its platform, and Hastings said at a conference in 2017 that the firm was not well-positioned to compete on ads with the likes of Facebook and Google. However, Hastings has now realized that the ad business has grown and proved lucrative for competitors like Hulu and Disney and says “We don’t have any doubt that it works”.
Netflix Ad-Supported Subscription Plan: Launch
We’re now very certain that Netflix will offer an ad-supported subscription plan. The streaming behemoth, however, has not given a rollout for the ad tier. The company stated on Wednesday that the transition is in its “very early days” and that it has “much to work through.” However, as per New York Times, the plan may come by the end of 2022.
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