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Netflix subscription with ads could reach the end of the year, says report

Netflix recently told employees that a new lower-priced, ad-supported subscription category from the company could arrive by the end of the year, according to a report in the New York Times on Tuesday.

The company is struggling with heated streaming competition: Shares tumbled last month after Netflix reported its first quarterly loss of subscribers in more than a decade.

Netflix CEO Reed Hastings said in April that the company was open to adding commercials to the service, shocking the media and advertising industry. Hastings for years refused to place commercials on the platform.

“Anyone who follows Netflix knows that I am against the complexity of advertising and a big fan of the simplicity of subscription. But as much of a fan as I am, I’m a big fan of consumer choice,” Hastings said in the post-earnings call last month.

“And allowing consumers who like to have a lower price and are tolerant of advertising to get what they want makes a lot of sense.”

Hastings added in April that Netflix (NFLX) was trying to figure out how to bring ads to the platform “in the next year or two.” But this process appears to be accelerating.

The company, which declined to comment on this story, is trying to figure out ways to bring in more cash, stop the bleeding on Wall Street and reverse the narrative about its stock.

However, the news startled investors, prompting Netflix shares to tumble 1% after the report. Stocks were higher before the New York Times report.

Another revenue-generating area that Netflix has been exploring is possibly making it difficult for its subscribers to share passwords. The note to employees also said that Netflix will begin this password effort around the same time it plans to debut the ad tier.

In March, the company said it had been working for a year on ways to “allow members who share away from home to do so easily and safely, while also paying a little extra.”

Netflix reported in April that it has 221 million subscribers, making it a leader in the streaming market, but that it lost 200,000 users in the first quarter of 2022. If that wasn’t enough, it noted that it expects to lose another two million in the second quarter.

The loss of subscribers and misdirection have led investors to question the future growth of Netflix and even the entire streaming business.

Source: CNN Brasil

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