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Despite pressure from investors to bring in more revenue, Netflix is still saying no to ads.
Netflix CEO, Reed Hastings said on Tuesday during the company’s Q4 earnings call, that it is not planning to go with an ad-supported option. Hastings did also explain that there is no “easy money” in online advertising.
Hastings is referring to the fact that it would need to compete with the likes of Google, Amazon and Facebook in that space. All of which are well established, and have much larger user-bases for showing ads. Especially when it comes to Google.
“Google, Facebook and Amazon are tremendously powerful at online advertising because they’re integrating so much data from so many sources. There’s a business cost to that, but that makes the advertising more targeted and effective. So I think those three are going to get most of the online advertising business,” Hastings said during the conference call.
Good news for Netflix subscribers
That’s really good news for the Netflix subscribers that are dead set against having ads.
Many complain that Hulu charges you, and then still shows you ads. Though, it is much cheaper than Netflix is, coming in at only $5.99 per month right now, you are still seeing ads. And typically ads are used to pay for subscriptions, so that the user can get it for free. YouTube is a big example of that.
While bringing in ads would allow Netflix to keep prices where they are, while paying more for content, it wouldn’t be smart, or even good for its customers. Besides content, one factor that users love about Netflix, is that it is ad-free. So you can sit down to watch an hour-long show, and be done in about 40 minutes, because there are no ads.
Ads are hated by everyone on the internet. They are usually obtrusive and annoying. But when it comes to streaming networks, ads give you a break to go use the bathroom or go get some food, during a long binge watching session.
Investors want Netflix to bring in more revenue
This is always the case with investors, but they do want Netflix to bring in more revenue.
Which means that Netflix is going to need to figure out a way to do that. Of course, Netflix could simply raise prices again (which is likely going to happen again anyways), but there’s only so many price increases its customers can take before they start to look elsewhere.