Netflix Apparently Changed Its Mind And Is Adding A Paid Tier With Ads
The road has been a bit rough as of late for Netflix, as the company shared in a recent newsletter with its shareholders that its revenue growth had "slowed considerably." The streaming service also indicated that it expected to lose an additional 2 million subscribers in the second quarter, on top of the 200,000 it said it lost in the first quarter. Netflix has been adamant that the loss of subscribers was not due to a recent price increase, but it may be changing its tune as it seems it will be introducing a lower-cost tier to its lineup that will include ads.
This seems to contradict what CFO Spencer Neumann said back in March at a Morgan Stanley investor conference. When asked about the potential for ads on Netflix, Neumann remarked that if the conditions were right at some point it might happen, but probably not anytime soon. It seems that the right time was actually sooner, rather than later.
Having suffered the loss of so many subscribers could bring the thought of a potential buyout in the future for Netflix. When asked about that, Sarandos admitted that it "is always a reality, so we have to be wide-eyed about that." However, he remained confident that the company could turn things around on its own. "We have plenty of scale and profitability and free cash flow to continue to grow this business." The company is scheduled to release its second quarter results on July 19, 2022.
What do you think of Netflix adding a lower cost tier that includes ads? Would you be willing to pay less for the streaming service, while having to endure ads while watching? Let us know in the comments.
Top Image Credit: Netflix