Netflix speeds up advertising and password changes

Netflix reported sweeping changes to its platform, but initially hinted it would be a while away. Now it is happening much sooner than expected.

Netflix will accelerate sweeping changes to its service by introducing a cheaper ad-supported tier and cracking down on password sharing by the end of the year.

When netflix executives first reported the moves, the timing of the ad-supported option was be “within two years”.

Now it’s a matter of months, not years, and the password crackdown will happen at the same time.

The turbocharged schedule was revealed by The New York Timesciting an internal memo that was leaked to publication by two staff members whose identities have been withheld.

According to NYT, the note read: “Yes, it is fast and ambitious and it will require compromises.” He did not specify what those “compromises” might be.

For years, Netflix has sworn it would never integrate advertising on its platform, so this decision is a drastic reversal. The announcement follows a horror start to 2022 that saw the streaming giant’s share price hammered by 70%, resulting in the loss of tens of billions of dollars of its market value.

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In April, Netflix revealed it suffered a net loss of 200,000 subscribers in the first three months of the year, well below its own forecast and its first decline in a decade. It also said it expected another loss of 2.4 million in the current quarter.

Although Australia does not currently have paid streaming services with a low-cost ad-supported tier, the practice is more established in the US where Paramount+, HBO Max, Peacock and Hulu all have the option. Disney also announced in March that it would introduce a cheaper, ad-supported tier on Disney+.

Although Disney and Netflix haven’t disclosed their prices, on average, ad-supported tiers on other US services cost about half the price.

Netflix’s rating seemed to justify its reversal by pointing the finger at its rivals.

“Every major streaming company except Apple has, or has announced, an ad-supported service. For good reason, people want cheaper options.

Netflix’s adoption of advertising will open up a distinct revenue stream for the company while attracting a new roster of customers who may have been reluctant to sign up due to cost. It could also potentially thwart churn and cancellations at a time when consumers are being hit by rising costs of living and inflationary pressures.

The company also reaffirmed its plans to recoup lost costs from password sharing, where customers give their passwords to friends and family outside their homes. The common practice is prohibited in the terms and conditions, but 100 million of its 222 million members do.

Although Netflix previously said the crackdown was not a priority, it is now keen to prosecute the moochers.

The service is testing a feature in Costa Rica, Peru and Chile in which customers who share their passwords must pay an additional fee, between $3 and $4 for each additional household.

It’s been a tumultuous three weeks for Netflix since it released its last financial statements. Along with changes to advertising and password sharing, the company is also cutting costs.

He fired his animation chief and several employees in the same department while cutting a slew of projects currently in production, including Meghan Markle’s upcoming series pearl as well as an adaptation by Jeff Smith Bone.

He also canceled the Steve Carell series space forcethe superhero show produced by Michael B. Jordan Raising Dion and Canned Will Smith’s Fantasy Movie Sequel Bright.

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