Netflix is looking to diversify its subscription tiers and launch a new tier of cheaper ad-supported plans, Engadget reports.
The CEO Reed Hastings, speaking on the company’s most recent earnings call, said those plans will be available to customers “over the next year or two.”
He also said he loves the simplicity of subscriptions and thinks the current ads are complex. Also, some customers who have no problem seeing the ads can pay less money, and it “makes a lot of sense.”
The new plans will be a part of the company’s tiers, and the members who can pay the full subscription fees won’t have to watch ads. “It is pretty clear that it is working for Hulu, Disney is doing it, HBO did it. We don’t have any doubt that it works,” Hastings said. He also added that Netflix remains a publisher and won’t track users’ data to match ads.
Netflix raised subscription fees have become an issue for the company
The Netflix subscription fees have always been a controversial issue for the company. Some customers believe that current fees are expensive, and the service really isn’t worth it. In late March, Netflix even raised its fees and now charges $9.99 per month for its basic plan. Also, The standard plan now costs $15.49 per month, and the 4K tier costs $19.99.
The controversy around subscription fees and other reasons caused the company to lose 200,000 subscribers in Q1 2022. Netflix says the account sharing among households and growing competition are the main reasons for losing customers. Currently, over 222 million households are using Netflix, but over 100 million of them are sharing their accounts.
However, Netflix cheaper ad-supported plans can stoke interest in company’s tiers and justify the price customers are paying. Netflix has also started testing its new plans in Chile, Costa Rica, and Peru. The company now allows its users in those areas to add two “sub-members” for $3. The sub-members will get their own log-ins and profiles. This could be a way out for the company and let it to make a little money from shared accounts.