Netflix will never host advertising or enter battle for live news and sport, CEO says

Movie streaming site will forgo lucrative revenue source in favour of commitment to content, Reed Hastings promises

Joe Sommerlad
Thursday 08 March 2018 16:02
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Netflix CEO Reed Hastings
Netflix CEO Reed Hastings

Streaming giant Netflix has pledged that it will never feature advertising on its site and has no intention of entering the battle for live news and sports broadcasting.

"Our content is our crown jewel," said CEO Reed Hastings, speaking two days after the company won an Oscar for its Russian sports doping documentary Icarus and ahead of the release of the new series of Jessica Jones.

"It's up to us to take [subscribers'] money and turn it into great content for their viewing benefit."

Speaking at Netflix Labs Day, a rare press event at the company's headquarters in Los Gatos, California, Hastings stressed his opposition to "chopping up" the site's movies and TV shows to accommodate commercials.

"Having a great experience... vastly outweighs the fact that one company is gaining a lot of influence," he said, alluding to Netflix's market dominance, now under renewed threat from rivals Amazon Prime, Hulu and Disney (bolstered by its recent multi-billion dollar takeover of Fox).

Hastings is seemingly prepared to forego the lower prices and increased revenue advertising would bring and is putting his money where his mouth is, investing $8bn (£5.77bn) in original programme-making in 2018 alone.

The movie library has 117m subscribers across the world and has increasingly turned its attention from acquisition to production, despite resistance from the Hollywood establishment over the challenge it represents to conventional distribution and the future of cinema screening.

As for live sports and current events broadcasting, an area of interest being explored by the likes of Facebook and YouTube, Hastings said:

"To follow a competitor? Never, never, never. We have so much we want to do in our area, so we're not trying to copy others... There's lots of things we don't do. We don't do news, we don't do sports. But what we do do, we try to do really well."

Netflix is notoriously secretive about its user base and reluctant to reveal data on viewing statistics but Scott Mirer, the company's vice president for device partnerships, did yesterday take the opportunity to offer an interesting snapshot of how subscribers around the world use its services.

Globally, 25 per cent of Netflix subscribers stream movies using mobile networks. Finland - where 75 per cent of streaming comes from mobile - is one exception and Mexico is another: almost all of its viewers stream on wi-fi.

Netflix is most commonly watched on TVs rather than portable devices with children more likely to watch on tablets.

France and South Korea lead the field in running Netflix on the commute, Mirer revealed, while sci-fi is, appropriately, the genre most likely to be viewed on a computer.

The company also used its Labs Day to announce that it would be introducing 30-second vertical trailers on its mobile app, which users will be able to swipe through in a manner similar to SnapChat.

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