Netflix Inc co-founder Reed Hastings said on Wednesday he was “wrong” to oppose ads for his streaming service.
Hastings said Hulu proved that streaming services could support advertising and offer consumers low prices.
“I wish we’d flipped on this a few years ago,” Hastings said during the New York Times DealBook summit.
netflix It is one of the few platforms that has stayed away from the advertising model for its video streaming. Ads have become a significant source of revenue for the platform, and this entry by Hastings confirms the trend. Netflix relies on Microsoft to power its advertising venture.
And given its massive user base of around 222 million, Netflix has enough data to sell ads with ease. Partnering with Microsoft helps the company develop advertising tools and sales. While advertisers will love the opportunity to advertise on Netflix, the new plan will also bring a new subscription that could become more popular in countries like India Where people don’t necessarily have to pay for premium subscriptions.
Netflix is also discouraging password sharing. The company announced earlier this year that it would charge a nominal fee to people who share their passwords with acquaintances. In March, Netflix launched a pilot in three countries (Peru, Costa Rica, and Chile).
Netflix has launched a new plan called “Basic with Ads” in 12 countries – Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, the UK and the US. This is the cheapest Netflix monthly plan that comes with some compromises and ads.
Netflix said at launch that the ads would be either 15 or 30 seconds in length, which would run before and during shows and movies. The new Netflix Basic with Ads plan costs $6.99 per month. The difference is that in order to save $3 monthly, users will have to watch ads and lose access to unlimited movies and TV shows.
Netflix has said that with the ‘Basic with Ads’ plan, “some movies and TV shows will be unavailable.” The resolution of the content will be up to 720p HD. Thankfully, users will have access to Netflix games without any ads. The platform hasn’t said whether the add-tier will launch in markets like India, where it already caters to an audience with a special mobile-only plan that starts at Rs 149 per month.
,With inputs from Reuters,
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