Netflix is planning to introduce ads, its chief executive has announced.
The streaming giant is examine the option of adding advertising in the “next year or two”, boss Reed Hastings said during an earnings call.
Those earnings showed that Netflix is rapidly losing subscribers for the first time in its history. Following the results, Netflix announced a range of possible changes, including a much bigger crackdown on people sharing accounts.
One of those changes is likely to be the introduction of advertising. Mr Hastings said that advertising would allow for a “lower price”, though the company has also hiked the price of its subscription a number of times recently.
Netflix has never included ads in its app, instead allowing users to watch videos instantly and without any commercial breaks. But Netflix has said that advertising is now an “exciting opportunity”, as the company faces growing concerns over its growth.
“Those who have followed Netflix know that I have been against the complexity of advertising, and a big fan of the simplicity of subscription,” Mr Hastings said during the call.
“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.”
Mr Hastings referred to other companies such as Hulu, Disney and HBO, who have offered cheaper, ad-funded tiers. He suggested it would be like Hulu’s offering, which lets people pay less for a plan that includes ads.
He also stressed that the company would not be using data tracking or other invasive technology.
“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,” Mr Hastings said in the call. “We can stay out of that, and really be focused on our members, creating that great experience.”
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