Netflix tells employees ads may come by end of 2022

Netflix could introduce its lower-priced ad-supported tier by the end of the year, a more accelerated timeline than originally indicated, the company told employees.

In the note, Netflix executives said that they were aiming to introduce the ad tier in the final three months of the year, according to two people who shared details of the communication, speaking on condition of anonymity to describe internal company discussions. The note also said that they were planning to begin cracking down on password sharing among its subscriber base around the same time, the people said.

Last month, Netflix stunned the media industry when it revealed that it would begin offering a lower-priced subscription featuring ads, after years of publicly stating that commercials would never be seen on the streaming platform.

But Netflix is facing significant business challenges. In announcing first quarter earnings last month, Netflix said that it lost 200,000 subscribers in the first three months of the year — the first time that has happened in a decade — and expected to lose 2 million more in the months to come. Since the subscriber announcement, Netflix’s share price has dropped sharply, wiping away roughly $70 billion in the company’s market capitalization.

Netflix currently offers a variety of payment tiers to access its streaming service; its most popular plan costs $15.49 a month. The new ad-supported tier will cost less. Other streaming services have similar plans. HBO Max, for instance, offers a commercial-free service for $15 a month and charges $10 a month for the service with advertising.