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NETFLIX has entered discussions to take on advertising partners and bring commercials to the service for the first time in its history.
Company executives say they’ll introduce another tier of service that does include ads.
Netflix is communicating with Google, Comcast, and NBCUniversal to flesh out an advertising package for streaming, the Wall Street Journal reported.
The company excelled during the COVID-19 pandemic when lockdowns had customers streaming constantly but has experienced a major reversal of fortunes in 2022.
Netflix lost subscribers after ten years of growth and forecasts say they could lose as many as 2million more users by the end of this quarter.
“We’re not adding ads to Netflix as you know it today. We’re adding an ad tier for folks who say ‘hey, I want a lower price and I’ll watch ads’,” Netflix co-CEO Ted Sarandos said.
Netflix’s other CEO Reed Hastings has previously railed against advertisements but conceded would benefit “consumer choice” in a recorded interview.
If Netflix follows the model set by other streaming services, the ad-supported tier will cost about half of the premium tier.
Right now, a standard Netflix account in the United States is about $16 a month.
At the same time, Netflix is dialing up a strategy to combat password sharing.
Netflix has been in a tailspin since the streaming space became crowded with the likes of Paramount+, Disney+, Peacock, and others.
These companies own decades of intellectual property and pulled their shows from Netflix in favor of operating their own platforms.
Worse yet, Netflix’s own in-house content has flopped – their film Spiderhead debuted on June 17 and has a dismal audience score of just 32% on Rotten Tomatoes.
Netflix needs something to work and reignite the fire – they just laid off 300 employees and the stock price is at a five-year low.
Meanwhile, co-CEOs Hastings and Sarandos are slated to be compensated at a rate of nearly $40million each.