Netflix is finally considering ad support on its streaming services. Netflix recently lost 200,000 subscribers in the first quarter. At the end of the first quarter, the streaming service provider had 221 million subscribers worldwide with 200,000 charges and lost an expected net profit of 2.5 million. Speculation is that the subscriber decline is due to Netflix’s recent January 2022 price hike.
Reed Hastings, co-founder, president, president, and co-CEO of Netflix, said of the profit claim that while he likes the simpler subscription model that longtime Netflix customers have come to expect, he is considering offering customers more choice for advertising medium to allow.
In his words, “… And one way to increase price dispersion is to advertise with cheap plans and have lower prices with ads. And those who follow Netflix know that I went against the complexity of ads and I’m a big fan of simplicity distinctive.”
He adds, “While I’m a fan of that too, I’m a big fan of consumer choice. And allowing consumers who want a lower price and tolerate advertising to get what they want.
There was no indication of when or how the announcement would be made. However, given recent developments, the comments demonstrate its importance. In addition to reporting a subscriber shortage, Netflix reported its first global subscriber decline since 2011. It criticized competition in part, raising concerns about the overburdened industry more heavily than before. Currently, Netflix has 221.6 million paying customers and is still a leader in its segment; however, the current loss of subscribers indicates your limited options. Speaking of ad hosting, Hastings said, “And in terms of earning potential, the online advertising market has certainly progressed. And now you don’t have to include all the information about the people you used to be. You can be a publisher directly and let other people see all the hype making advertising offers and integrating all the people’s data so we can really focus on our members creating this great experience and once again offering this service in a first-class way from multiple displays from different companies.”