Couple of weeks back, Netflix leadership team has announces that the streaming service will not introduce or run advertising on their platform.
Now the streamer has change the tune and toying with the idea of introducing cheaper ads supported plans. Will the move be successful, only time will tell.
The firm reported a loss of 200,000 subscribers in Q1, will introduce the ad-supported plan to give customers more choice said company’s co-chief executive Reed Hastings.
“Those who have followed Netflix know that I’ve been against the complexity of advertising and a big fan of the simplicity of subscription,” Hastings said. “But as much as I’m a fan of that, I’m a bigger fan of consumer choice.”
The streamer is faced with serious competition from its rivals such as Amazon Prime, Apple Plus TV, Disney+ and its sister company Hulu.
The company’s co-CEO acknowledged the planning field has change, saying the ad model has matured enough and proven successful for rivals such as Hulu and Disney. “We don’t have any doubt that it works,” he said.
“Allowing consumers who would like to have lower price and are advertising tolerant get what they want makes a lot of sense,” he said, adding that the company is not viewing the ad-supported model as a “short-term fix.”
Hastings said, “the customers who don’t wish to see ads will continue to be offered ad-free plans.”
“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. So we can be a great publisher and have other people do all the fancy ad-matching and integrate all the data about people, so we can stay out of that,” he said.
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