Netflix plans to launch cheaper plans supported by advertising.
Netflix co-CEO Reid Hastings unveiled a three-month conversation about the company’s earnings on Tuesday, adding that the company will study what the plans will look like “next year or two.” Netflix CEO Greg Peters said the ad was “an exciting opportunity for us.”
“Those who have followed Netflix know that I was against the complexity of advertising and I am a big fan of the simplicity of the subscription,” said Hastings. “But as much as I’m a fan of it, I’m a big fan of consumer choice. And allowing consumers who would like to have a lower price and are tolerant of advertising to get what they want makes a lot of sense. ”
Hastings said the hug from competitors has played a role in changing the company’s mindset.
“It’s pretty clear he works for Hulu, Disney does, HBO does. We have no doubt that it works, “Hastings said, adding that it would be a planned layer similar to Hulu.
Hastings also said that when Netflix launches an ad-supported level, it will do so as a publisher, without tracking data and matching ads that some competitors accept.
“In terms of profit potential, the online advertising market is definitely advanced, and now you don’t have to include all the information about the people you’ve used,” Hastings said. “We can stay away from that and really focus on our members, creating this great experience.”
The relocation of the ad marks a major change for Netflix, which has been opposed to advertising its services since its inception. But with subscriber growth slowing and now declining, the potential to attract new, more price-sensitive ecosystem users is too great to ignore.
The decision also confirms the advertising industry’s investment in streaming, with many top retailers demanding that the streaming giant allow them to advertise on the service.
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