Back in December, 2019, before the pandemic upended everything, I speculated that Netflix would launch an ad-supported tier in 2020. Subscriber growth in the U.S. was slowing in 2019 and there was reason to believe that in Q1 ’20 Netflix might lose subscribers in its UCAN (U.S. + Canada) region.

A lower-priced ad-supported tier would have multiple benefits: reducing churn, revenue growth/diversification by tapping into the white hot connected TV ad market, a way to compete with new lower-priced streaming entrants, new growth story for investors, etc. The key challenge was that Netflix had for years said it had no interest in an ad-supported tier; it wanted to stick to its ad-free brand identity and user experience.

But the pandemic led to stay at home orders, which in turn drove a spike in streaming. Instead of potentially losing UCAN subscribers in Q1 ’20, Netflix gained over 2.3 million subscribers. Globally Netflix added a massive 15.8 million subscribers in Q1 ’20, followed by another 10.1 million additions in Q2 ’20. Netflix candidly explained that future years’ growth had been pulled forward by the pandemic.

Now, with the vaccine rolling out and the world on the cusp of returning to some state of normalcy, a “digital attention recession” is coming, said analyst Laura Martin at Needham & Company last week. With it will come increased churn for streaming services, especially at Netflix which has the most subscribers, no other services to bundle and no low-cost ad-supported service for subscribers to fall back to, or for Netflix to use for promotion.

Laura cited a survey from Deloitte from December showing that the percentage of all streaming subscribers who had both added and cancelled a service had increased to 34%, from 9% in May. The survey also found that 62% had signed up to watch a specific show and cancelled their subscription when they were done watching it.

Most other streaming services are mitigating churn by having lower-priced and/or free ad-supported tiers or related services. For example, Hulu offers a $5.99/mo tier, a $6 discount to its ad-free version. Discovery+ has a $4.99/mo tier (a $2 monthly discount). Peacock has a free tier and a $4.99/mo tier (a $5 discount). Paramount+ has a $5.99/mo tier (a $4 discount). Last week WarnerMedia’s CEO Jason Kilar said HBO Max will launch its ad-supported tier in June. Though no price was disclosed Kilar said $80 million in advertising has already been secured, underscoring the appeal of premium content viewed on CTVs to advertisers.

In addition to lower-priced ad-supported tiers, bundling and cross-promotion are tactics Netflix’s competitors are using effectively. The best bundling example is the Disney+/Hulu/ESPN+ bundle. Meanwhile ViacomCBS is using Pluto to promote Paramount+ and has even created dedicated, free Showtime channels in Pluto to promote content and subscriptions. And Peacock is using its free tier to give access to the first two seasons of “The Office” and upsell these viewers to a paid plan.

In short, Netflix’s competitors all recognize viewers aren’t monolithic and that different price points and access models are required for different segments. Netflix has always had multiple subscription levels. But as prices have moved up, there’s room to create a lower-cost offering for casual and/or budget-minded subscribers that would mitigate churn and create new revenues.

Netflix’s first quarter earnings are to be released on April 20th; this would be a perfect opportunity for Netflix to unveil an initial plan for a lower-priced ad-supported tier.