As he is wont to do on occasion, the CEO of Netflix (Reed Hastings) has answered questions in relation to whether or not the streaming platform he heads up can continue to remain ad-free. The subject has always been one of interest for those within the industry, and also is probably relevant to the service's 180 million subscribers...most of whom we'll go ahead and guess fucking loathe ads. After all, one of the allures of streaming is being able to watch content that isn't broken up by attempts to sell you stuff.
This also is a time in which this topic is getting renewed attention because of the emergence of NBCUniversal's Peacock, which allows viewers to watch for free if they'll sit through a commercial, though they can bypass that by upgrading to the paid service. In that way it's similar to Hulu (except, of course, that Hulu makes you pay for its cheaper ad-laden version).
For the purpose of this article, Hastings' comments on the topic came to Variety. Though he also did an interview on many overlapping topics with The Wall Street Journal. Note he's making the media rounds because he's co-authored a new business book called No Rules Rules: Netflix and the Culture of Reinvention.
To Variety, Hastings said the decision to go ad-less is based in business. As he puts it, there's much more to gain by increasing subscribers than there is by running ads. Asked why the company has never violated their "rule" to run ads, Hastings said it wasn't a rule it just wasn't great strategy.
"It’s definitely not a rule. It’s a judgment call," he said. "It’s a belief we can build a better business, a more valuable business [without advertising]. You know, advertising looks easy until you get in it. Then you realize you have to rip that revenue away from other places because the total ad market isn’t growing, and in fact right now it’s shrinking. It’s hand-to-hand combat to get people to spend less on, you know, ABC and to spend more on Netflix. There’s much more growth in the consumer market than there is in advertising, which is pretty flat. We went public 20 years ago at about a dollar a share, and now we’re [more than] $500. So I would say our subscription-focused strategy’s worked pretty well. But it’s basically what we think is the best capitalism, as opposed to a philosophical thing."
He also goes on to talk about how the pandemic has impacted Netflix's shows, what he thinks of working from home (nothing good), and what's planned for original content in 2021. Read him at Variety and WSJ, though you'll need some time. They're both lengthy.
