Netflix made yet another change to the platform

Netflix made the change to sporting advertisements on the platform for more revenue

In 2021, Netflix's original content and subscriber count reached unprecedented heights, propelling its market cap to over $300 billion. However, the tide turned in 2022 as subscriber numbers dwindled, prompting the streaming giant to make strategic shifts. Contrary to co-founder Reed Hastings' prior stance, Netflix introduced a more affordable, ad-supported subscription tier to diversify its user base and capitalize on advertising revenue. Although the ad-supported tier had a slow start, it quickly gained traction, attracting 5 million subscribers within six months. Currently, it constitutes 40% of new sign-ups, and Netflix continues to enhance the plan by introducing features like 1080p video and simultaneous dual-streaming.

Concurrently, Netflix tackled the long-standing issue of password sharing, implementing measures to curb the practice. Despite subscriber dissatisfaction with frequent price hikes, the crackdown proved beneficial, resulting in more sign-ups than cancellations and increased revenue. Undeterred, Netflix proceeded with another price increase, marking its third in as many years. Simultaneously, the company phased out its $11.99 per month ad-free plan and aims to eliminate it entirely, directing users toward the $6.99 per month ad-supported option or the $15.49 per month standard tier. Surprisingly, Netflix revealed that its ad-supported plan already yields higher revenue per customer compared to the pricier ad-free alternative. Co-CEO Greg Peters emphasized the company's commitment to "scale" in its advertising business, focusing on making the ad plan more appealing and adjusting pricing structures strategically.