Netflix Hinted At Ads & A Password-Sharing Crackdown After Revealing It Lost Subscribers

Netflix is losing customers — and it's already looking at big changes to stop the bleeding.

The popular streaming service reported this week that it lost 200,000 subscribers in the first quarter of 2022, instead of adding the 2.5 million users it expected to see.

That prompted the company to float the idea of an ad-supported subscription tier and to blame password-sharing for some of the loss.

Netflix has already been experimenting with ways to charge users for sharing passwords, and the company now says that over 100 million households are getting a free ride under the current system. The company is testing a password-sharing fee in some regions that would charge account holders $2-3 per month for additional profiles, reported Forbes.

The sudden drop in subscribers has caused Netflix’s shares to plummet by 25%, and it expects to lose another 2 million subscribers in the short term, CNET reports.

Netflix cited several other factors for the loss, including more streaming competition, a withdrawal from Russia and backlash against its latest price hikes.

It's unclear exactly when Netflix might be introducing an ad-supported tier or how much it would cost, but Co-CEO Reed Hastings did give a bit of info about it on an earnings call this week.

Hastings said the changes could come "over the next year or two," according to The Hollywood Reporter.

He said he's always been a fan of "simplicity" and keeping ads off the platform, but he also recognizes that some people might be willing to tolerate them for a cheaper monthly fee.

"It is pretty clear that it is working for Hulu, Disney is doing it, HBO did it," he said. "We don’t have any doubt that it works."