Netflix (NASDAQ: NFLX) has been struggling over the past year. Since the company reported a subscriber loss for the first time in more than 10 years, growth investors have been dumping the streaming stock. Year to date, its shares are now down 63% compared to the S&P 500 's decline of 17%.
But Netflix has a strategy to drive more growth and win investors back, and that's by introducing ad-based plans. It's not a move that everyone is a fan of; however, there are reasons investors should be bullish on this pivot.
By offering ad-based plans, Netflix can offer consumers lower price points, potentially as low as $7 a month. That's less expensive than its basic plan, which today costs $9.99. With inflation still posing a big problem for the economy, consumers could opt for ads on their streaming services if it means trimming costs. And the new plans could be coming as early as Nov. 1, in order to get the jump on rival Walt Disney , which is unveiling its ad-based plans in December.
For further details see:
Why Netflix's Ad Strategy Could Be a Huge Win for the business