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Reed Hastings: Netflix ‘trying to figure out ad-supported streaming’

After years of declining calls for an ad-supported tier of streaming, Netflix co-founder and co-CEO Reed Hastings said Tuesday that the company is “very open to offering even lower prices with advertising as the consumer choice.”

Apparently, the company is now exploring the option and “trying to figure it out in the next year or two.” Hastings admits that introducing an ad-supported tier would mean a major rethink for the company, saying he’s always been “anti-complexity of advertising and a big fan of the simplicity of subscriptions.”

Hastings now pitches the idea of ​​an ad-supported tier as something that “makes a lot of sense” for “consumers who want a lower price and are ad-tolerant.”

According to Tuesday’s news that it lost subscribers for the first time in ten years, Netflix seems open to many things it had declined to do — co-CEO Ted Sarandos even laid out what a long-rumored move into live esports might require. Quoted by meetingHe said, “I’m not saying we’re never going to play sports, but we need to find a way to make it a big revenue stream and a big profit stream,” which marks a significant shift from the non-Netflix flat previously offered.

Netflix would be far from the only company to introduce an ad-supported tier. Competitors like Hulu, Peacock and even HBO Max offer plans where consumers have to pay less (or, in Peacock’s case, nothing) if their shows are occasionally interrupted. Disney announced that too Adding an ad-supported option to Disney Plus by the end of the year.

Netflix currently charges $10 per month for the Basic tier, $15.49 per month for the Standard tier, and $20 per month for the Premium tier. These awards are relatively new — the company launched them in March. During the call, Hastings says he’s proud of Netflix’s “price range,” but as we detailed in January, the company’s deep market penetration means it has limited opportunities to make more money apart from raising the prices again and again. Introducing a cheaper, ad-supported tier (as well as attempts to restrict password sharing) could be part of the company’s plan to increase the number of its customers and introduce another revenue stream.

Update 7:18pm ET: Added note that Ted Sarandos links to live sports.

https://www.theverge.com/2022/4/19/23032869/netflix-ads-streaming-reed-hastings-lower-price Reed Hastings: Netflix ‘trying to figure out ad-supported streaming’

Fry Electronics Team

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