Streaming giant Netflix has seen a major drop in share price. In order to combat this, the company has announced plans to introduce commercials to the user experience.
In April, Netflix announced the first drop in subscribers in nearly a decade. The streamer continues to hike up the price to subscribe while more and more streaming services pop up. Netflix is the highest priced streaming service.
Netflix CEO Reed Hastings told investors that an ad-supported option would roll out over the next few years. Since then, Hastings has released a note stating the rollout might be sped up.
“Yes, it’s fast and ambitious and it will require some trade-offs,” the note said.
Should Netflix roll out an ad-supported option, the price point for that plan would be much lower.
My Thoughts: It is surprising to me that Netflix has put this off for so long. At the very least, having a robust source of revenue from ads, the company could help fund their content creation fund. Netflix is heavily indebted due to high production costs. Doing this would help service the debt.
Netflix’s high price point is also counter productive to growth, in my opinion. Having this ad-supported option would allow more people to subscribe to the service.