Netflix bosses haven’t ruled out the possibility of introducing an advert-supported subscription tier on the streaming service.
Speaking at a recent investor conference, company CFO Spencer Neumann admitted he could “never say never” when asked about the idea of introducing ads on Netflix, though he did clarify that the move is “not something in [the brand’s] plans right now."
The response comes in light of Disney’s decision to introduce an ad-supported subscription tier on Disney Plus later this year, in a bid to provide more choice to consumers.
“It’s not like we [Netflix] have a religion against advertising, to be clear,” Neumann told audience members at Morgan Stanley’s 2022 Technology, Media & Telecom Conference. “But that’s not something that’s in our plans right now. We have a really nice scalable subscription model, and again, never say never, but it’s not in our plan.”
It’s clear, then, that Netflix has no intention of replicating Disney’s strategy any time soon, but Neumann’s comments nonetheless run contrary to the streamer’s long-standing aversion to subscription-based advertising. They also suggest that Netflix executives are threatened – or, at the very least, intrigued – by the idea of rival platforms profiting from the expanded business model.
"It's hard for us to ignore that others are doing it,” Neumann admitted, “but for now it doesn't make sense for us.”
Disney’s move to begin testing ad-supported content on its streamer follows HBO’s introduction of a cheaper, ad-supported subscription tier on HBO Max last year.
For $9.99 (around £8 / AU$14) per month, subscribers to the more affordable version of the service can access the same library of movies and TV shows as those on the standard tier, albeit without the ability to download content for offline viewing or stream it in higher quality than 1080p.
There’s been no official word yet on how much Disney’s equivalent ad-supported tier might cost, though we’d anticipate similar parameters on the content available to subscribers.
Incidentally, it appears Netflix is also facing pressure from investors to develop a lower-cost subscription tier to boost revenue. Reuters reports that the company's rate of acquiring new subscribers has slowed in recent quarters, with Netflix shares suffering as a result.
So, will Netflix stick to its guns and resist the temptation to introduce an ad-supported subscription tier on its platform? For now, almost certainly – but we expect the allure of more subscribers (and by extension, more revenue) will supersede the company’s existing business strategies in a matter of years.
Still, it's worth clarifying that if indeed Netflix does cave in and follow the crowd on this particular matter, it isn't likely to affect the subscription options already available to customers.
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