Ted Sarandos, co-CEO of Netflix, told The Hollywood Reporter that the company is planning to introduce an ad-supported tier to draw in customers who don't want to pay the full price.
The aim of the plan is to get people who don't mind ads to sign up for the service. "We've left a big customer segment off the table, which is people who say that they don't mind advertising because it's too expensive for them," he said. We're adding an ad tier, but we're not adding ads to the service right now. We're going to add an ad tier for people who want a lower price and watch ads.
The ad-supported tier may come out before the end of the year, but the company has told employees that it is aiming for a launch before that time.
The Standard plan is more expensive than the Basic plan, but it has 480p streaming. The most expensive plan is the one that only offers 4K. The ad-supported tier of the service would likely offer the same streaming quality as the Basic plan.
The company is also planning on cracking down on account sharing. Some countries have been testing an extra payment for people who share their account with others.
It was the first time in a decade that the company lost subscribers. The company said revenue growth slowed due to a large number of households sharing accounts. More than 200 million paying households are sharing with more than 100 million households that aren't being monetized, according to a report. There will be more effective monetization of multi-household sharing in the future, according to the company.
The changes that are planned could bring back growth to the company. "We have plenty of scale and profitability and free cash flow to continue to grow this business," he said.