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“Those that 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,” Hastings said. “Allowing consumers who would like to have a lower price and are advertising-tolerant [to] get what they want, makes a lot of sense.”
While Hastings didn’t offer any insight as to how much Netflix might charge for an ad-supported tier, their Basic plan currently goes for $9.99 a month, their Standard plan is $15.49, and their Premium option is $19.99. “It’s not like we have a religion against advertising, to be clear,” Netflix CFO Spencer Neumann said at a Morgan Stanley investment conference. He clarified that the tier was “not something that’s in our plans right now,” but continued with, “never say never.” This statement was made just one month ago.
This is the first time in Netflix history that the company has reported a loss of subscribers, and lost a whopping $50 billion in value after it was publicly reported that it had fallen short of its subscriber goals. During the Q1 call, Hastings even acknowledged that their competitor, Hulu, has shown success with their ad-supported programming, and was interested in seeing how the ad-supported tier at HBO Max would play out over time. “We don’t have a lot of doubt that it works,” he said.
For those who are happily enjoying their ad-free programming, never fear, as this option will always be available. Ad-support may become an option, but will hopefully never replace the standard or else it’s cable all over again.
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