Netflix’s ad supported subscription packages likely to be launched by the end of this year

Netflix had one of its worst financial quarters earlier this year when it reported slowing revenue growth for the first in 10 years. After they revealed that their subscriber base had fallen by over 200,000 users in the last fiscal quarter, the company's stock fell by over 40 per cent, wiping off about $54 Billion of its market cap.

Back then, there were reports which suggested that Netflix would soon start showing advertisements in between content, starting sometime in 2023 or 2024. The streaming giant has now decided that they will be implementing the advertisement-based solution right from this year.

Netflix is planning to introduce a number of new subscription packages which will be supported by advertisements, by the end of 2022. These packages will be replacing the current packages that the streaming giant offers. The introduction of the new packages means that current users in all likelihood will have to upgrade their packages if they want to continue enjoying their ad-free experience on Netflix.

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Netflix had also planned on introducing a system that would make users who share their passwords in a household pay more. Although at the time when this news got leaked, Netflix’s co-CEO Reed Hastings said that they would be implementing this in a year or two, recent reports suggest that Netflix will be implementing the system from this year itself.

According to the Times, a recent note to employees said executives are now aiming to introduce the ad tier at some point in the last three months of 2022, with a crackdown on password sharing starting in the same window.

If Netflix indeed goes through with this and introduces one or more tiers of subscription that are supported by ads, chances are all major streaming services, namely, Amazon Prime Video will follow suit. According to Times, Disney is planning to introduce an ad-supported subscription tier in North and South America, as well as in Africa, and see how that pans out. If it works out well, they will be bringing the same model to Europe and Asia. 

In India, the mobile subscription plan for Rs 149 per month and the basic plan for Rs 199 per month are likely to be replaced with the ad-supported subscription. It will be interesting to see whether that impacts their user base in India in any manner.