Netflix Has No Plans Yet for an Ad-Supported Tier

The company’s plan to split its streaming service into two tiers is a step in the right direction, but it would need more than just additional content if it wanted to fully compete with Hulu and Amazon Prime. Netflix has no plans yet for an ad-supported tier.

Netflix-Has-No-Plans-Yet-for-an-Ad-Supported-Tier Dima Solomin (photo) (Unsplash)

Disney revealed earlier this month that it will launch an ad-supported subscription for its streaming service later this year, allowing fans who don’t mind bothersome commercials to watch Marvel movies, Star Wars episodes, and other material for a lower, yet-to-be-determined fee. Netflix consumers hoping for something comparable despite increasing membership rates should not hold their breath, as Netflix CFO Spencer Neumann said at a conference this week that the streaming service has no plans to launch an ad-supported model. While Neumann didn’t totally dismiss the possibility (“never say never”), the Netflix executive indicated that commercials are damaging to the watching experience.

Despite Disney+’s announcement, Netflix claims an ad-supported tier is still not in the works (TechCrunch)

[…] Netflix’s existing subscription strategy is being defended by Neumann, who claims the company is focused on “optimizing for long-term revenue…and we want to do it in a manner that provides a wonderful experience for our subscribers.”
The underlying logic seems to be that inserting adverts may assist lower the cost of a subscription, hence attracting more members, but it may also degrade the end-user experience.
[…] In its Q4 2021 results, Netflix slightly missed Wall Street expectations for subscriber growth. The firm said at the time that the dip was only transitory and reflected the later-in-the-quarter premieres of several of its most anticipated series, such as the second season of “Bridgerton.” In its shareholder letter, however, it acknowledged that rising competition from competing streamers “may be impacting our marginal growth.”