The troubles at Netflix, embattled of late by cutbacks and staff reductions and messy talent affiliations and subscriber drops, are heating up: The company just announced to employees that it will start rolling out a commercial-supported tier on the service as soon as later this year. While the move isn’t exactly a surprise, it’s certainly coming a lot faster than expected. As we reported in April, a course correction on a streaming company this large can take a lot of time, and when Netflix CEO Reed Hastings announced plans for an ad strategy at the company’s first-quarter investor call a few weeks ago, industry insiders called the hastily announced plans “a desperate attempt to deflect from the subscriber numbers.”
The new note, sent to Netflix employees and reported by the New York Times, accelerates the timeline to sometime in the last three months of 2022, just as the company is planning a crackdown on password sharing. “Yes, it’s fast and ambitious and it will require some trade-offs,” the missive said, noting how much consumers love to pay less for their streaming options. “Every major streaming company excluding Apple has or has announced an ad-supported service.” A discount is welcome — the cheapest price tier was raised to $10 a month earlier this year — but for years we have gotten used to an interruption-free, easily bingeable Netflix. That was part of the appeal of streaming. With the rise of commercial-supported tiers, the arc of streaming history looks as if it’s bending back toward broadcast TV. Get your mute buttons ready.
