Netflix co-CEO Reed Hastings revealed in an earnings call, that the streaming service plans to roll out cheaper subscriptions by including advertising material.
According to The Hollywood Reporter, Hastings said that the company plans to analyse the ways in which they could make subscription plans cheaper “over the next year or two”.
The news follows the announcement that the streaming giant had lost 200,000 subscribers in the last quarter.
“Those who have followed Netflix know that I have been against the complexity of advertising, and a big fan of the simplicity of subscription,” Hastings said.
“But as much as I am a fan of that, I am a bigger fan of consumer choice. And allowing consumers who would like to have a lower price, and are advertising-tolerant, get what they want, makes a lot of sense.”
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The Hollywood Reporter also stated that Netflix felt encouraged by the success of ads for other streaming competitors.
Hastings added: “It is pretty clear that it is working for Hulu, Disney is doing it, HBO did it. We don’t have any doubt that it works.”
The co-CEO also claimed that when the streaming service do unveil an “ad-backed tier”, it would do so a publisher, meaning the company would not track data or partake in ad-matching.
“In terms of the profit potential, definitely the online ad market has advanced, and now you don’t have to incorporate all the information about people that you used to.”
“We can stay out of that, and really be focused on our members, creating that great experience.”
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