Netflix introducing ads after 200,000 subscriber loss, blames password sharing

Netflix may be considering a new subscription tier that lets viewers pay less in exchange for watching ads, after the streaming giant saw its subscriber numbers fall for the first time earlier this year.

Netflix cofounder and CEO Reed Hastings reportedly told investors that the firm is "quite open to offering even lower prices with advertising, as a consumer choice", and will be trialling and testing it over the next year or two.

It represents a major U-turn for the platform after the company's CFO ruled out ads on Netflix at a tech conference in Marching, saying "it's not in our plans right now".

The news comes as Netflix reports its first subscriber loss in more than 10 years, with 200,000 paid subscribers ditching the service.

Hastings blamed account sharing, saying that an estimated 100 million households around the world are using a shared Netflix password.

"We realized with all of the account sharing, which we've always had—that's not a new thing—but when you add that up together, we're getting pretty high market penetration.

"And that, combined with the competition, is really what we think is driving the lower acquisition and lower growth."

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Netflix is said to already be testing a new feature in Chile, Costa Rica and Peru where subscribers can two extra members to their account for a small extra fee.

The company predicts it could lose 2 million subscribers in the next three months, as the value of its stocks plummeted by more than 21% following an earnings call.

The idea of Netflix introducing ads has previously provoked anger in some subscribers.

One Twitter user, Giles Holtby, said: "Rage! Literally the whole point of Netflix is that you pay the subscription so you don't have to watch adverts."

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