Netflix To Accelerate Launch of Commercial-Based Tier As Losses Continue

Netflix is accelerating plans to introduce a lower-priced ad-supported tier, the company stated in a note to employees.

The note says that Netflix will release the tier in the final three months of 2022, just weeks after co-chief executive Reed Hastings said the tier would not debut for another "year or two."

Subscription declines have been worse than expected, instigating the change of pace inside Netflix. The company reported a loss of 200,000 subscribers in the first three months of the year, the first decline in a decade, and it expects to lose two million more subscribers in the months to come.

Its market capitalization has since dropped by $70 billion as well. So even though it had promised for years that it would never rely on commercials, Netflix has now turned to ads as a way to offset its declining base.

Though Netflix enters an ominous phase, it will, in fact, attract top sponsors because it still leads all streaming platforms in total monthly subscribers with 220 million, even with the recent losses.

Sponsors go where the eyeballs are.

As for subscribers, the story gets worse. The note to employees also says that Netflix will quickly crack down on password sharing.

You freeloaders and Disney -- which has taken its original content away from Netflix -- are why streaming has become a major inconvenience for the rest of us.

For what it's worth, I'll be sticking with the ad-free Netflix tier for $15.49 a month or whatever they charge now. Unless the ad-supported costs $5 or less, I am not signing up to watch Charmin interrupt my Stranger Things binge. No way.