Netflix CEO Reveals The Streaming Service Could Soon Have Advertisements

Netflix users wanting to save a bit of money could soon be streaming their favourite TV shows and movies alongside advertisements.

The platform's co-CEO, Reed Hastings, has been against such a move in recent years, however, in Tuesday’s earnings call he admitted that the service could be looking to include adverts in the future.

He said: “Those who have followed Netflix know that I have been against the complexity of advertising, and a big fan of the simplicity of subscription. 

“But as much as I am a fan of that, I am a bigger fan of consumer choice. 

“And allowing consumers who would like to have a lower price, and are advertising-tolerant get what they want, makes a lot of sense.”

Netflix lost 200K subscribers in Q1 and expect to lose another 2M in Q2

It's the first time they lost subscribers in over a decade pic.twitter.com/R6Km2JKxJU

— Culture Crave 🍿 (@CultureCrave) April 19, 2022

The admission comes after Netflix announced their first decline in subscribers for a quarter in more than 10 years, which led to the company’s shares dropping by more than 20 per cent. 

The streaming service had previously forecast 2.5 million new paid subscribers in Q1 and now expects to lose an additional 2 million global subscribers in Q2. 

Seems like they may have to be open to a lot of things they had once been against. 

Netflix wouldn’t be breaking any new ground for subscription services if they were to introduce an ad-supported tier.

Just last week, Disney confirmed they would be adding such a tier to Disney+, while the likes of Hulu, Peacock, and Paramount+ are also available with commercials. 

However, Hastings made a note that Netflix wouldn’t need to support the ad-tiers with any data tracking.

He said: “In terms of the profit potential, definitely the online ad market has advanced, and now you don’t have to incorporate all the information about people that you used to. 

Netflix increases the prices, restricts people from sharing passwords, releases mid content, makes back to back sequels to Red Notice and expects people to stay subscribed pic.twitter.com/MKpBHbWGSH

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“We can stay out of that, and really be focused on our members, creating that great experience.”

According to Netflix’s latest financial report, in addition to the 222 million paying households, Netflix is being shared with more than 100 million additional households. 

Looks like everyone sharing their password is catching up to the streaming service, with the report admitting that the issue makes it ‘harder to grow membership in many markets’. 

Hastings said: “These are already over 100m households that are already choosing to view the service. They love the service, we have just got to get paid at some degree for them.”

Hopefully, their next big move doesn’t include somehow further preventing password sharing.