Netflix hopes to launch ad-supported tier and crack down on password sharing this year

Following its rare drop in subscriber numbers last quarter, Netflix is accelerating its efforts to attract new users. According to a new report from The New York Times, Netflix is aiming to launch a more affordable ad-supported tier sometime during the fourth quarter of this year.

Around that same time, Netflix is also hoping to roll out its long-rumored crackdown on password sharing…

According to today’s report, Netflix laid out this timeline in an email to employees. During last quarter’s earnings call, Netflix CEO Reed Hastings indicated that the company would take its time to roll out an ad supported tear, saying the company would “figure it out over the next year or two.”

The company now appears to have accelerated that timeline, with today’s note to employees explaining that the goal is “fast and ambitious” and “will require some trade-offs.” Netflix also pointed out that “every major streaming company excluding Apple has or has announced an ad-supported service,” and that consumers are hungry for “lower-priced options.”

Netflix is clearly still in the early stages of planning its lower-priced tier with ads, so we still don’t know much about it. As it stands today, the cheapest Netflix plan is $10 per month, while you’ll have to shell out $20 per month if you want 4K streaming. Netflix’s most recent round of price increases went into effect last month.

At the same time as it is planning an ad-supported tier, Netflix is also aiming to crack down on password sharing. The company detailed its plans to charge more for sharing passwords in March, explaining that it was testing the ability to “easily and securely” share your password with people outside of house, but at the cost of “paying a bit more.”

In today’s note to employees, Netflix said that it hopes to implement its password sharing changes “around the same time” as the launch of the ad-supported tier.

Netflix is banking on these changes increasing both subscriber numbers and revenue. The company lost 200,000 subscribers during the first quarter of the year. Perhaps more notably, however, the company also predicted that it will lose two million subscribers in Q2.