Netflix's ad-supported tier and password-sharing crackdown could arrive later this year

Shawn Knight

Posts: 14,049   +152
Staff member
What just happened? Change could be coming to Netflix sooner rather than later. In a recent note to employees, executives said they are planning to introduce an ad-supported tier in the fourth quarter of this year. The streaming giant will also begin to crack down on password sharing during the same time frame, the note stated.

The details come from two sources that relayed the information anonymously to The New York Times.

Following a disappointing earnings report last month that saw the company lose 200,000 subscribers, Netflix said it would consider offering a lower-priced, ad-supported tier. At the time, co-chief executive Reed Hastings said they would try to "figure it out over the next year or two."

Sources said the note indicated that "it's faster and ambitious and it will require some trade-offs," and pointed out that every major streaming service except Apple has or has announced an ad-supported service.

Netflix in the note further said it would roll out a plan to charge for account sharing in tandem with an ad-supported tier.

In March, Netflix said it was testing ways to curb account sharing between households. The company doesn't want to ban sharing outright, but it does want all viewers to pay their fair share for consuming its content.

A recent survey conducted by Leichtman Research Group found that nearly a third of all US-based Netflix subscribers share their login credentials between households.

Netflix's stock is up more than 4.5 percent as of writing after shedding nearly 70 percent of its value since the beginning of the year.

Image credit John-Mark

Permalink to story.

 

Dimitriid

Posts: 2,096   +4,004
I don't think ad supported is as big of an issue on it's own but the creep up in prices it represents: I'm sure they'll start with something like "Add supported tier at 420p quality" and/or timed delays on new content to incentivize people to go to a paid tier but soon after, now the lowest tier gets add unless you pay for more and then the tier after that now gets ads too and on it goes.
 

emmzo

Posts: 594   +729
Cracking down on password sharing it's going to drop even more subscribers, because there's cheaper alternatives or eventually... O, ho, ho and a bottle of rum. But they say, hey, if you want it cheaper, half the time you'll be watching commercials. Yeah, that's gonna help...
 

Scshadow

Posts: 659   +316
Put me in the list of people who will not be paying for Netflix. I had sympathy for Netflix. Every media company under the sun who didn't invest in streaming technology has slowly bled Netflix dry with either no offers of renewing contracts or offering contracts expensive enough that they might as well have not offered a re-contract at all. Every other media company under the sun has an existing revenue source with which to support them if they need to undercut the cost of their streaming service in order to build a user base. Most of Netflix's compelling content now has to come from within their own studios and obviously its very hit or miss. Running Netflix has no doubt become expensive. But cracking down on account sharing is stupid. No, it will not go over well. I'm frustrated that 4K isn't offered at every tier of the service at this point in 2022. You want us to pay for 4 streams at a time so I can only watch one of them? I live alone. I pay for 1Gbps Fiber. I want 4K. What about mobile? What if I want to sign in somewhere else? What if I want to travel?

Netflix must lower prices if they are going to crack down on password sharing and they are going to have to offer 4K on all service tiers. If not, they're going to scratch their heads and wonder why they lost so many subscribers. They're going to have to ask themselves if it was worth it. Netflix killed pirating because it was simply more convenient to pay and get a proper service. Between exclusivity deals and original content being produced by each streaming service, we've come to the point where suddenly pirating content sounds more convenient. Its not all on Netflix, but this move will be all on them.
 
Cracking down on password sharing it's going to drop even more subscribers, because there's cheaper alternatives or eventually... O, ho, ho and a bottle of rum. But they say, hey, if you want it cheaper, half the time you'll be watching commercials. Yeah, that's gonna help...
But why wouldn't you got straight to the high seas instead of wasting money on Adflix?
 

emmzo

Posts: 594   +729
But why wouldn't you got straight to the high seas instead of wasting money on Adflix?
It's a problem of money vs comfort. For 20 bucks, I'll rather hoist the sails, but for less I don't mind paying. If they had added 4k on one device, no commercials for a decent price I wouldn't have minded. But their offer is made in such a way that you either pay max price or watch at low resolutions and not by much less money, so, there's no point in buying a lower tier.
 
It's a problem of money vs comfort. For 20 bucks, I'll rather hoist the sails, but for less I don't mind paying. If they had added 4k on one device, no commercials for a decent price I wouldn't have minded. But their offer is made in such a way that you either pay max price or watch at low resolutions and not by much less money, so, there's no point in buying a lower tier.
Fair enough. On the same topic, what do you think the effects of the mass subscribers drop of will be on the open water.
 

wiyosaya

Posts: 7,494   +6,300
Fair enough. On the same topic, what do you think the effects of the mass subscribers drop of will be on the open water.
Personally, I think people are overestimating the effects of this. Though others here have said that they are going to drop Netflix, I, for one, will not be.

Then again, I do not, and have never, shared my account - no one has ever asked me to.

With several hundred million subscribers, the subscriber loss would have to be in the 10's of millions, IMO, for Netflix to notice.

Time will tell what happens, but it is entirely within the realm of possibility that this move might attract subscribers that would offset those who have said they will drop the service, IMO.

IMO, other services, for myself and my wife, are not worth continuing subscriptions. Netflix is the only one we subscribe to on a monthly basis.
 

Aceseven

Posts: 285   +366
...so they show movies and tv shows? you pay for it? and it'll have commercials?

THAT'S CABLE TV!!!

we've done all this just to come back to cable tv, call it what it is netflix, geez with all these services people will be right back to paying the same as cable in the end. who'd have thought the year 2022 was just a portal back in time with whats going on in the world right now, sad.
 

emmzo

Posts: 594   +729
I was curious what a fellow pirate thought about this. Because every time I bring up piracy my friends tell me its stupid to overcomplicate yourself with getting a game or other software for free.
Sorry, matey, I haven`t left harbor for years.
 

GoldenGoat

Posts: 36   +28
Eventually it will cost more and everyone will have to watch ads. Just like cable tv. Probably will eventually have live sports too. Streaming will eventually be cable TV without the cable.