After so many years of refusing to play commercials on this amazing platform, there are several reports that they might do it this year. That fast? Yes!
Netflix recently told its employees that the company’s new lower-priced ad tier may come by the end of this year.
It was already openly talking about pushing people who share their account logins to pay more. Netflix CEO, Reed Hastings, said in April the company was open to adding advertisements to the service – shocking the media and advertising industry. Hastings has for years refused to put commercials on the platform.
But Netflix is facing significant business challenges. In announcing first-quarter earnings last month, Netflix said it lost 200,000 subscribers in the first three months of the year — the first time that has happened in a decade — and expected to lose two million more in the months to come. Since the subscriber announcement, Netflix’s share price has dropped sharply, wiping away roughly $70 billion in the company’s market capitalization.
If that wasn’t bad enough, it noted that it expects to lose another two million in the second quarter. The subscriber loss and bad guidance have led investors to question the future growth of Netflix and even the entire streaming business.
Netflix executives said that this move is all about good strategy—to maintain strong brands while offering ad-supported service, comparing to big streaming platform businesses like HBO and Hulu.
