Co-CEO Reed Hastings said in April that the business was willing to consider a tier system based on advertising after years of rejecting the concept of commercials. The decision came in when the company announced that it lost subscribers for the first time in over a decade. In June, co-CEO Ted Sarandos said the ad tier was in the works, and in July, Netflix named Microsoft as a partner in the technology that will assist serve to advertise. Additionally, Sarandos has stated that subscribers won’t get access to the complete Netflix catalog on the ad-supported tier. While all of the original programs will be available to consumers, certain licensed content won’t be available at the cheaper tier. He clarified by saying: The article from Bloomberg on Friday provides some further information on the ad tier. The corporation wants to sell four minutes of advertising per hour, and they want to place those commercials before and in the middle of the content. This week, Bloomberg reported that Netflix did not intend to integrate advertisements with its original movies or children’s content. The timing of the new advertising strategy is worrisome. Three months after the startling decline in subscribers that occurred in April, Netflix revealed another decline. The advertisement system is a workaround for the financial losses which occurred due to the immense drop in subscribers. Netflix also revealed that it is working on a mechanism to prevent password/account sharing to increase the audience watching their shows.
