On the day that it reported the loss of subscribers for the first time in more than a decade, it was revealed that it is considering an ad-supported tier for a lower subscription fee.
Reed Hastings made the revelation during a conference call with investors.
Hastings said a strong belief in consumer choice could persuade him to backtrack on his opposition to an ad-supported tier. He may have been influenced by the exodus of 200,000 subscribers in the three-month period ending March 31.
Hastings said that he was against the complexity of advertising and a big fan of the simplicity of subscription.
Hastings said that an ad-supported service wouldn't likely land for at least a year, meaning that for now subscribers are stuck with paying $10 a month for the basic tier, $15.50 for the standard tier, and $20 for the premium service.
Disney+ will be adding an ad-supported tier for U.S. based customers later this year, followed by an international roll out in 2023. The entire package of Amazon Prime costs $139 per year and includes lots of other services. The Apple TV+ plan requires subscribers to pay $5 per month.
Hastings said on Tuesday that he expects to lose 2 million subscribers in the current quarter. He put the losses down to a number of factors, including increased competition from rivals, the war in Ukraine, and password sharing.
He said that a surge in signups during the Pandemic had cured the picture as people begin to go out more.
Whether the proposed ad-supported service will be a success depends on how much the company decides to charge, as well as its ability to maintain an attractive library of content that beats, or at least matches, that offered by its competitors.
Are you planning to cancel the service? Here is how to do it. Digital Trends has a list of the top 50 movies for April.
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