California Observer

Netflix to introduce lower prices and ads-service due to fall in stock


Image source: Agenhoy

Netflix is still reeling from its stock plunge last month after losing subscribers for the first time in more than a decade.

To turn the narrative back in its favor, analysts have suggested adding ads and clamping down on password sharing. But one way Netflix can help itself is by allying with an industry that it was once at odds with movie theaters.

Even though Netflix has released many films in theaters—and has even bought a few theaters to boot—most of its theater releases have been purposefully limited. With the streamer licking its wounds and theaters slowly bouncing back from the pandemic, now could be the time for both sides to finally come together. Although the set date for the implementation of this has not been made public, in the interim, the streaming platform is looking to implement lower prices and ad support to arrest the falling stock situation. 

This was made public in April when Netflix’s CEO shocked the media and advertising world when he announced that the business was open to adding adverts to the service in a swift reaction to the fall in stock. For years, Hastings has refused to allow ads on the platform. 

Those who have followed Netflix know that I am opposed to advertising complications and a huge advocate of subscription simplicity. But, as much as I support it, I am a bigger supporter of consumer choice. ” Last month, Hastings stated on a post-earnings call. So it also makes sense to allow consumers who choose a cheaper price and are tolerant of advertising to receive what they want.

Hastings said in April that Netflix was trying to find out how to bring advertisements to the site “over the next year or two.” However, it looks like the process is speeding up. Netflix, which declined to comment for this story, is attempting to find new ways to raise funds, stop the bleeding on Wall Street, and change the perception of its stock. 

However, the news alarmed investors, and Netflix stock fell 1% following Hastings’ announcement. As observers of the stock market observed, prior to the New York Times piece, shares were higher. 

In an attempt to fix the falling stock and reduce revenue, Netflix is also looking into cracking down on password sharing among its customers as a potential revenue source. Netflix’s communication to workers also reportedly stated that the password endeavor would begin around the same time as the ad-tier launch.

The company announced in March that it had been working for a year on ways to “allow members who share outside their family to do so conveniently and securely, while also paying a little more.” 

Netflix announced in April that it has 221 million customers, making it the market leader in streaming, but that it lost 200,000 people in the first quarter of 2022. If that wasn’t terrible enough, it also said it expects to lose another two million dollars in the second quarter. 

Investors are questioning Netflix’s and the streaming industry’s future growth due to subscriber losses and poor projections. 

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