Unless you've been living under a rock, you know that Netflix has had some problems this year. Their stock tanked and they lost subscribers this year. They're in a bad spot and there have been several ideas floating around to help the company stay afloat.
One of those ideas is the insanely unpopular crackdown on password sharing. The other is a new ad-supported tier. The New York Times reported that Netflix told its employees that the ad-supported tier may appear by the end of this year, 2022. This change comes after years of saying they would never add commercials to their platform.
"Our revenue growth has slowed considerably as our results and forecast below show," Netflix execs told shareholders in a press release.
"Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally. However, our relatively high household penetration – when including the large number of households sharing accounts – combined with competition, is creating revenue growth headwinds," they added. "The big COVID boost to streaming obscured the picture until recently. While we work to reaccelerate our revenue growth – through improvements to our service and more effective monetization of multi-household sharing – we'll be holding our operating margin at around 20%."
Shareholders have sued Netflix, arguing that they were mislead about the state of the company. The shareholders say Netflix "made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects."
They add, "(Netflix's) positive statements about the Company's business, operations, and prospects were materially false and/or misleading and/or lacked a reasonable basis," considering how they were "exhibiting slower acquisition growth" and "experiencing difficulties retaining customers."
Last month, Netflix also explained that they would charge higher prices to subscribers with shared accounts.
“So if you’ve got a sister, let’s say, that’s living in a different city — you want to share Netflix with her, that’s great,” Greg Peters, Netflix’s chief operating officer, explained in an earnings call. “We’re not trying to shut down that sharing, but we’re going to ask you to pay a bit more to be able to share with her.”
Peters also said that the company would puzzle out the password sharing plan for "a year or so". In the note to employees, Netflix said the ad-tier would appear “in tandem with our broader plans to charge for sharing.”
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Netflix May Introduce Ads This Year—Earlier Than Expected
Source: Pinoy Inquirer News
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