Confirmed – Adverts are coming to Netflix and much sooner than we thought

Netflix will roll out an advert-supported subscription tier by the end of 2022, it was revealed yesterday (May 9). 

The New York Times reports that Netflix executives have told their employees that are hoping to introduce a lower-cost advert-supported tier by the end of the year, a far more accelerated timetable than previously briefed. 

Things have moved very quickly for Netflix, given at the start of March the company Chief Financial Officer Spencer Neumann was only go as far as saying that he could “never say never” when asked about the idea of introducing adverts on Netflix and went as far as clarifying that the move was “not something in [the brand’s] plans right now.”

Then, on April 20, during an earnings call, Netflix head honcho Reed Hastings revealed that the streaming service was then “quite open” to the possibility of an advert-supported tier. That was after he’d previously been quoted as suggested that an advert-supported offering would be something Netflix could “figure it out over the next year or two.”

“Quite open” has now seemingly shifted to “definitely happening”, and Neumann’s “not right now” is looking like it’ll hold only until October…

The news comes as the same time as it was confirmed that Netflix will begin to crackdown on password sharing at the end of this year. 

The streaming giant is making the move as it looks to shore up revenue. It announced in late April that it had lost 200,000 subscribers since the start of 2022, and, as a result, saw its value fall by more than $50 billion. 

This announcement has seen Netflix cancel a series of shows, park many of their in-development projects, including one from Prince Harry and Meghan Markle, and close Tudum, the streaming giant’s editorial presence. 

An advert-supported, lower-price tier isn’t a revolutionary idea for a subscription service. Hulu, HBO Max, Paramount Plus and Peacock do it already and Disney Plus will be bringing in the option this year, the reason it’s a surprise is due to the fact that Netflix’s top brass were adamant, weeks ago, that it was just an idea…

Analysis: Are Netflix panicking?

There’s a bit of panic. That’s fair to say. Netflix’s change of heart has been rapid, and, coupled with its new crackdown on password sharing, it does suggest that the company is scrambling somewhat. 

Providing a cheaper option for subscribers is never a bad thing and it’s vastly preferable to saving money by axing employees and canceling shows. Things just seem to be moving so fast for Netflix, every day seems to bring some new drama, and this announcement will not help matters. 

A period of calm and maybe some show renewals would help. Let’s wait and see…