Advertisements could be a part of Netflix as early as October 2022, according to an internal company note to staff, first reported on by the New York Times.
Last month, after years of claiming the company would never be ad-based, Netflix executives revealed they were considering incorporating ads into the platform. And CEO Reed Hastings said the move was something the company was “trying to figure out over the next year or two,” in an investor call. Now, NYT reports that Netflix is aiming to introduce the ad tier in the “last three months of the year.”
“Yes, it’s fast and ambitious and it will require some trade-offs,” the note said, according to the Times. The company leaned on their competitors’ models when announcing the shift to ads in the note. From the NYT:
Indeed, in the note to employees, Netflix executives evoked their competitors, saying that HBO and Hulu have been able to “maintain strong brands while offering an ad-supported service.”
“Every major streaming company excluding Apple has or has announced an ad-supported service,” the note said. “For good reason, people want lower-priced options.”
A Netflix spokesperson told Gizmodo they had no comment on the leaked note, but said in an email, “we’re exploring an ad-supported plan for those who would be interested, but we’ll still have plans without ads.” The spokesperson declined to specify how, exactly an ad-based tier would fit into the current funding model, but the NYT reported that any new ad-supported subscriber level will cost less than the current, most popular $US15.49 ($22)/month option.
The note also referenced Netflix’s plans to monetise password sharing on the platform, something it has tested in a voluntary capacity in the past.
The pivot to advertisement follows a troubling recent quarterly earnings statement for Netflix, in which the company reported it had lost 200,000 subscribers, the first subscriber drop in a decade. Immediately after that report, the streaming platform’s stock nosedived and, as of writing this, is down by almost 50% this month. Soon after the reported subscriber and stock losses, the company laid off multiple writers it had hired for its blog endeavour, Tudum.