Netflix has sped up plans to introduce a cheaper subscription plan in a bid to retain customers, after its quarterly figures revealed it had lost 200,000 people in just three months.
The streaming service has been one of the corporate victims of the cost of living crisis, with hundreds of thousands of users quitting to the service to keep up with mounting expenses.
On April 19, Netflix announced its numbers had fallen for the first time in a decade – losing 200,000 customers against a target of adding 2.5million new subscribers.
They said they expect to lose two million more in the second quarter, as the share price fell significantly, wiping away roughly $70billion in total.
In response, Reed Hastings, Netflix's co-chief executive, said the company was considering introducing adverts on a cheaper subscription package, and would “figure it out over the next year or two.”
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A note to employees, obtained by The New York Times, revealed the new cheaper offering is now pencilled to be brought in in the final quarter.
Reed Hastings, the co-chief executive of Netflix, said last month that the company was looking into bringing in an advertiser-supported cheaper streaming service within the next couple of years.
The plan appears to have been dramatically sped up, and the service is now due to be unveiled at the end of this year.
“Yes, it's fast and ambitious and it will require some trade-offs,” the note said.
“Every major streaming company excluding Apple has announced an ad-supported service,” the note said.
“For good reason, people want lower-priced options.”
The executives pointed out that HBO and Hulu have been able to “maintain strong brands while offering an ad-supported service.”
Netflix offers several plans to its 221.64million subscribers - all without advertising.
Its most popular scheme costs £15.99 a month – it is unclear how much the new one will be.
Netflix executives said the advertising-supported tier would be introduced “in tandem with our broader plans to charge for sharing.”
In March, it hinted at plans to start charging people extra for sharing accounts with people outside of their household.
The streaming giant revealed it is testing technology that will ask subscribers to pay an extra fee if it detects people at multiple addresses logging in to the same account.
Although Netflix's terms do not allow users living apart to share an account, it has long tolerated the practice, leading to password sharing.
Its most expensive price plan lets up to four screens view different shows at the same time, meaning anybody with access to a viewer's password has been able to watch for free.
Netflix said it would soon start testing new features that let subscribers pay to add "sub accounts" for up to two people they do not live with.
It is testing the changes in Chile, Costa Rica, and Peru, with the extra accounts costing 30% to 40% of a basic membership.
In the UK, a £2.99 a month charge would mean a subscriber on the most expensive plan paying £21.97 a month for two people living elsewhere.
