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Netflix Contemplates Introducing Ads, Cheaper Plans To Fight Subscriber Loss

Netflix Contemplates Introducing Ads, Cheaper Plans To Fight Subscriber Loss

Netflix Contemplates Introducing Ads, Cheaper Plans To Fight Subscriber Loss

Netflix fell significantly short of meeting its goal of adding 2.5 million subscribers due to the suspension of services in Russia and increasing competition in the subscription space — a challenge that cost the company 200,000 subscribers in Q1.

The losses resulted in the company’s stock tumbling by 26% on Tuesday, leading to a loss of nearly $40 billion. Since the company warned of an impending loss of subscribers in January, it has seen its value shrink by nearly half.

These challenges are prompting the streaming services giant to consider offering cheaper plan options with advertising, much like rivals Disney+ and HBO Max, Reuters reported.

“Those who have followed Netflix know that I’ve been against the complexity of advertising and a big fan of the simplicity of subscription,” said Netflix CEO Reed Hastings.

“But, as much as I’m a fan of that, I’m a bigger fan of consumer choice.”

The company is also looking to crack down on password sharing, starting with Latin America and then the U.S., to increase its subscriber base and drive revenue growth.

“When we were growing fast, it wasn’t a high priority to work on,” Hastings said of account-sharing in remarks during Netflix’s investor video. “And now we’re working super hard on it.”

While the company considers these alternate plans, it expects to lose 2 million paying subscribers in the second quarter, despite the upcoming release of popular shows such as Ozark and Stranger Things.

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