Netflix Is Planning To Introduce Adverts

Netflix has revealed plans to introduce adverts as a way to offer cheaper streaming options for its subscribers.

The lack of adverts is no doubt a big draw for many Netflix users, with viewers freely able to move from one episode to the next or flick between series without having to sit through even a few seconds of ads for supermarkets, holidays or upcoming shows.

It's that luxury which in part adds to the monthly subscription cost for Netflix, but co-CEO Reed Hastings revealed plans to introduce ads as an option during the company’s quarterly earnings call Tuesday (19 April).

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According to The Hollywood Reporter, Hastings explained that he has previously been 'against the complexity of advertising, and a big fan of the simplicity of subscription'.

"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," he continued.

The change is not likely to be imminent, as Hastings said Netflix will be examining exactly what the new options look like 'over the next year or two', but the bosses made clear their interest in the idea as Netflix COO Greg Peters described advertising as 'an exciting opportunity for us'.

Hastings added: "Think of us as quite open to offering even lower prices with advertising as a consumer choice."

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He went on to admit the plans come after competing subscription services began to introduce adverts to their platforms, saying it was 'pretty clear' the system was working for the likes of Hulu, Disney+ and HBO Max. "We don’t have any doubt that it works,” he said.

The co-CEO said the new options will work in a similar way to those offered on Hulu, in a plan layer, and that the plan which includes adverts would not use data tracking or ad-matching.

Hastings explained: "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. We can stay out of that, and really be focused on our members, creating that great experience."

The cheaper, ad-based options aim to draw more customers to the streaming service, which during its most recent quarter lost 200,000 subscribers despite having previously estimated to add 2.5 million subscribers in the same time period.