Netflix co-CEO Reed Hastings stated that the company should have entered the advertising market sooner after resisting the idea for years. He also stated that he was slow to embrace advertising on the streaming platform because he was preoccupied with digital competition from Facebook and Google.
According to Hastings, Hulu demonstrated that streaming services could support advertising while also offering lower prices to customers. In addition to Hulu, Warner Bros. Discovery’s HBO Max, NBCUniversal’s Peacock, Paramount Global’s Paramount+, and others already provide lower-cost, ad-supported options. Disney+ intends to launch a lower-cost, ad-supported tier while increasing the price of its commercial-free option and other streaming services.
“I didn’t believe in the ad-supported tactic for us. I was wrong about that. Hulu proved you could do that at scale and offer customers lower prices. We did switch on that,” Hastings said at The New York Times’ Dealbook conference. “I wish we had flipped a few years earlier on that, but we’ll catch up.”
According to Hastings, the reversal came after some convincing from Chief Financial Officer Spencer Neumann, as well as slowing subscription growth.
Netflix previously stated that it was open to the idea of advertisements in April, and it went on to launch in the United States earlier this month for $6.99 per month in collaboration with Microsoft.
The sources for this piece include an article in Reuters.