A more affordable, ad-supported plan could be introduced before the end of 2022, according to an internal letter.
The new ad-supported tier will be introduced in the final three months of the year in order to attract new subscribers who find the current pricing too expensive.
The company has been increasing its prices for the last few years. The basic streaming plan is now priced at $9.99, up from $8, and the standard plan that allows for HD streaming is now priced at $15.49, up from $13.98 per month.
The price of the highest-tier 4K Ultra HD streaming plan has gone up by $2. Disney+, Apple TV+, and others offer more straightforward pricing for streaming services, with the only service that prices by quality being Netflix.
In the past, the streaming service has said that it would never show ads, but it is hemorrhaging subscribers. In the first quarter of the year, the company lost subscribers for the first time in a decade. The company expects to lose two million subscribers next quarter.
The subscriber loss has been caused by account sharing, which is something that the company is going to crack down on. According to the letter, the company plans to restrict access to subscribers who share a household. More than 200 million households are sharing with more than 100 million households that are not being monetized.
In March, the company began testing an extra payment for people who share their accounts with others. Customers can pay an extra fee to share their accounts with two other people outside of their household in the current test markets of Costa Rica, Chile, and Peru. When the test was launched, the company said it was working to understand the utility of the two features before making changes in other countries.