The package is aimed at those who think Netflix is too expensive and don’t mind ads, and there are no plans to change the existing Netflix tier. Sarandos said: “We’re excluding a large group of customers, the ones who say, ‘Hey, Netflix is too expensive for me, and I don’t mind ads.’ We’re adding an ad tier; we’re not Adding ads to Netflix as you know it today. We’re adding an ad tier for people who say ‘hey, I want a lower price, I’d like to watch ads’.”
Netflix is already in talks with ad-selling partners, and while Sarandos did not provide details on what an ad-supported layer might appear, Netflix has told employees internally that it aims to launch by the end of 2022.
Netflix is understood to be priced at $9.99 for the Basic plan, which offers 480p streaming, while the Standard plan costs $15.49 for 1080p resolution. Netflix’s most expensive Premium plan, priced at $19.99 per month, is the only4KHierarchy for HDR streaming. Netflix is the only streaming service that charges extra for higher streaming quality, and the ad-supported tier will presumably offer streaming quality similar to the base package.
In addition to offering an ad-supported tier, Netflix also plans to crack down on account sharing. In some countries, Netflix has been testing paying extra for those who share their Netflix accounts with people outside the home.
In the first quarter of 2022, Netflix said it lost subscribers for the first time in 10 years. The company blamed a large number of home-sharing accounts and competition for the sharp slowdown in revenue growth. Netflix estimates that 222 million paying households share with another 100 million households that are not monetized. Netflix has confirmed that it plans to implement more efficient monetization of multifamily sharing in the future.
Sarandos said he believes Netflix can return to growth with planned changes. “We have enough scale and profitability and free cash flow to continue growing this business,” he said, adding that “there is still a lot of room for growth.”
