Netflix to make cheaper subscription plans with ads

Netflix is following other streaming services with plans to release a cheaper plans with ads to help spark subscription growth.

Published Wed, Apr 20 2022 10:04 AM CDT   |   Updated Thu, May 12 2022 11:35 AM CDT

Netflix will follow its competitors by offering a lower-cost subscription tier with advertisements.

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Netflix CEO Reed Hastings confirms the streamer plans to add new cheaper subscriptions with ads to stay competitive against its rivals. The strategy comes after Netflix lost over 203,000 subscribers in Q1 2022--the first loss in 11 years--and the company forecasts to lose another 2 million subs in Q2.

While Netflix hasn't concretely outlined its plans, Hastings says the new ad-based subscription tier will offer more consumer choice and highlights the benefits that ads have brought to Hulu, Peacock, HBO Max, and Disney.

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Netflix has lost some 203,000 subscribers in Q1 2022, dropping total worldwide subscriptions down to 221.6 million.

"Those who have followed Netflix know that I have been against the complexity of advertising, and a big fan of the simplicity of subscription, but as much as I am a fan of that, I am a bigger fan of consumer choice. And allowing consumers who would like to have a lower price, and are advertising-tolerant get what they want, makes a lot of sense," Hastings said in a Q1 2022 earnings call.

"It is pretty clear that it is working for Hulu, Disney is doing it, HBO did it. We don't have any doubt that it works."

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Derek joined the TweakTown team in 2015 and has since reviewed and played 1000s of hours of new games. Derek is absorbed with the intersection of technology and gaming, and is always looking forward to new advancements. With over six years in games journalism under his belt, Derek aims to further engage the gaming sector while taking a peek under the tech that powers it. He hopes to one day explore the stars in No Man's Sky with the magic of VR.

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