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Netflix Inc co-founder Reed Hastings said on Wednesday he was “wrong” to resist advertising for his streaming service.
Hastings said Hulu has demonstrated that streaming services can support advertising and offer consumers lower prices.
“I wish we had flipped a few years earlier,” Hastings said during the New York Times’ Dale Bock Summit.
Netflix It is one of the few platforms that has moved away from the advertising model of its video streaming. Ads have become a vital source of revenue for platforms, and this admission from Hastings confirms the trend. Netflix relies on Microsoft to run its advertising venture.
And due to its wide user base of around 222 million users, Netflix has enough data to sell ads easily. Partnership with Microsoft helps the company develop advertising and sales tools. While advertisers will love the opportunity to advertise on Netflix, the new plan will also bring a new subscription, which may be more popular in countries like India Where people don’t necessarily pay for premium subscriptions.
Password sharing is also discouraged by Netflix. This year the company announced that it would charge a small fee to those who share their passwords with their acquaintances. In March, Netflix launched a pilot program in three countries (Peru, Costa Rica, and Chile).
Netflix has launched a new plan called “Basic with Ads” in 12 countries – Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, the UK and the US. This is the most affordable monthly Netflix plan which comes with some compromises in addition to ads.
At launch, Netflix said, the ads will be 15 or 30 seconds long, which will run before and during shows and movies. The new Netflix Basic with Ads plan costs $6.99 per month. The difference is that to save $3 per month, users will have to watch ads and not only will they lose access to unlimited movies and TV shows.
Netflix has stated that with its “Basic with Ads” plans, “certain movies and TV shows will not be available.” Content resolution up to 720p HD. Fortunately, users will be able to access Netflix games without any ads. The platform did not say if the ad tier will be launched in markets like India, where it already offers viewers a special mobile-only plan starting at Rs 149 per month.
(With inputs from Reuters)
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