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20th Apr 2022

Netflix set to introduce ads for first time

Ellen Fitzpatrick

Say it ain’t so.

Netflix has announced that the company will be introducing ads into their streaming service for the first time ever.

Netflix co-CEO Reed Hastings has said that the only way to keep the company growing is to introduce a new form of revenue, ads.

As Chief Product Officer Greg Peters addressed the spread in pricing on Tuesday, Hastings gave his thoughts on how Netflix can bring in more money, according to Deadline.

“One way to increase the price spread is advertising on low-end plans and to have lower prices with advertising,” he said.

“Those who have followed Netflix know that I’ve been against the complexity of advertising and a big fan of the simplicity of subscription. But as much as I’m a fan of that, I’m a bigger fan of consumer choice. Allowing consumers who would like to have a lower price and are advertising-tolerant get what they want makes a lot of sense. So, that’s something we’re looking at now, we’re trying to figure out over the next year or two. Think of us as quite open to offering even lower prices with advertising as a consumer choice.”

Nothing was said about how or when this would be phased in but it was reported earlier this week that the streaming service saw its first decline in global subscribers since 2011.

Blaming competition from other streaming services, the executive voiced concerns over a crowded market despite Netflix leading the way with 221.6 million subscribers.

A recent price increase in the U.S. and Canada has made Netflix the most expensive streaming player out of them all.

Other newer platforms like HBO Max, Disney+ and Peacock have all added sponsored messages to the lower priced plans but Hastings has said in the past that this could bring up concerns about privacy.

Hastings admitted it is “not a short-term fix, because once you start offering a lower-priced plan with ads as an options, some consumers take it. And we’ve got a big installed base that probably are quite happy where they are. It would phase in over a couple of years in terms of being material volume.”