Report: Netflix Planning to Introduce Ad-Supported Tier in 2022
After a decade of resisting introducing an ad-supported tier, it appears that Netflix is wasting no time in moving forward with plans originally announced by co-CEO Reed Hastings last month to bring the lower-priced subscription option to consumers as quickly as possible.
This is ahead of the 12-24 month plan outlined during the company’s Q1 Earnings Call.
According to the New York Times, the streaming giant told employees in a recent memo that the company was working to bring the ad-supported option to the platform by the end of 2022. The paper of record’s sources also indicate that Netflix will begin rolling out further measures to curb password sharing at the same time.
The note sent to Netflix employees admitted that the move to include advertising on the platform was fast, especially given that the company has no existing operations to sell or implement ads amongst its content.
“Yes, it’s fast and ambitious and it will require some trade-offs,” the note said. “Every major streaming company excluding Apple has or has announced an ad-supported service. For good reason, people want lower-priced options.”
While there will need to be substantial technical, organizational, and logistical moves made behind the scenes at Netflix in order to bring the ad-supported tier live this calendar year, perhaps most importantly for customers, one of the major questions will be how ads are incorporated in the programming.
For TV series licensed from broadcast and basic cable channels, inserting ads into the traditional breaks should be relatively easy, but for Netflix’s original content, no such natural breaks occur, since the shows were written and shot with no concern for commercials. Will that mean that ads will be artificially inserted at random spots during the episodes, or will they be frontloaded to all happen before the content begins?
Only time will tell, but these are important questions that the streamer will need to get right in order to make the new user experience one that cost-conscious customers are willing to pay for.
Netflix is a subscription video streaming service that includes on-demand access to 3,000+ movies, 2,000+ TV Shows, and Netflix Originals like Stranger Things, Squid Game, The Crown, Tiger King, and Bridgerton. They are constantly adding new shows and movies. Some of their Academy Award-winning exclusives include Roma, Marriage Story, Mank, and Ma Rainey’s Black Bottom.
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