To attract more subscribers, Netflix may introduce cheaper plans soon. Netflix had reported that it had lost close to 2 lakh followers in the past one year. The streaming giant has also let go of more than 300 employees due to slow revenue growth. The reason why most paid subscribers have unsubscribed the app is because of the cost. Consumers are willing to endure ads but want the subscription plans to cost less. There are other factors like password-sharing that has added to the company’s woes. However, Netflix sure knows how to turn the tables as the company is now planning to introduce ad-supported cheaper plans.
Netflix CEO Ted Sarandos confirmed during an event that Netflix will roll out ad-supported plans sooner than expected. Sarandos had shared the company’s plans of introducing an ad-supported tier in an interview at the Cannes Lions advertising festival, The Hollywood Reporter confirmed. A report by The New York Times previously confirmed that the company is planning to launch the plans by the end of this year.
“We’ve left a big customer segment off the table, which is people who say: ‘Hey, Netflix is too expensive for me and I don’t mind advertising,'” Sarandos said Thursday, during the Cannes Lions stage with Sway podcast host Kara Swisher. “We are adding an ad tier; we’re not adding ads to Netflix as you know it today. We’re adding an ad tier for folks who say, ‘Hey, I want a lower price and I’ll watch ads.'” Interestingly, company CEO Reed Hastings has revealed that the ad-supported tiers will be added in a year or two, but the company is trying to get the plans out as soon as possible.
Hastings said during an interview that although he prefers plans that are ad-free, he does not wish to be oblivious to the consumer’s demands. As per him, the subscribers want cheaper plans even if the plans are loaded with ads. He revealed that the company’s decision to introduce ad-supported cheaper plans was driven by the success witnessed by Netflix’s rivals like HULU, Disney, HBO and others.
“I think it’s pretty clear that it’s working for Hulu, Disney is doing it, HBO did it. I don’t think we have a lot of doubt that it works, that all those companies have figured it out. I’m sure we’ll just get in and figure it out as opposed to test it and maybe do it or not do it” Hastings said.
Interestingly, several of Netflix’s rivals in India offer cheaper ad-supported plans. Streaming companies such as Disney+ Hotstar, Zee5, Voot and MX Player offer ad-supported subscription plans to consumers.
