What just happened? Changes may come to Netflix sooner rather than later. In a recent note to employees, executives said they plan to introduce an ad-supported tier in the fourth quarter of this year. At the same time, the streaming giant will also start cracking down on password sharing, the note says.

- Advertisement -

The details came from two sources who gave the information anonymously. New York Times.

- Advertisement -

After last month’s disappointing earnings report, in which the company lose 200,000 subscribersNetflix said it would consider offering a cheaper ad-supported tier. At the time, co-CEO Reed Hastings said they would try to “get it sorted out within the next year or two.”

Sources said the note stated “it’s faster and more ambitious and will require some compromises” and indicated that all major streaming services other than Apple have or have announced an ad-supported service.

- Advertisement -

Netflix, in a note, also said it would be rolling out a plan to charge for account sharing in tandem with an ad-supported tier.

In March, Netflix stated that testing ways to limit account sharing between households. The company doesn’t want to completely ban sharing, but wants all viewers to pay their fair share for content consumption.

A recent survey by the Leichtman Research Group found that almost a third of all Netflix subscribers in the US Share their login credentials between households.

At the time of writing, Netflix shares are up more than 4.5% after losing nearly 70% of their value since the start of the year.

Image credit John Mark