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This Is What Netflix Thinks of Bundles and Why It Continues to Say No to Ads

Richard Vega

After reporting their Q4 2019 earnings today, Netflix executives spoke during a video interview and provided insight about bundling and their no-ads policy.

In terms of bundling, Netflix’s Chief Product Officer Greg Peters said, “I anticipate that there are models that make sense where we’ll bundle multiple content services together and make it easier for consumers to access that … Really most of the bundles that we have are either connecting to an existing pay TV or legacy pay TV service, or they’re connecting to things like your mobile plan or internet plan, so I think there’s multiple different opportunities to find the right mix where we’re able to introduce Netflix as part of our set of offerings that just make it simple for people to sign up and it’s logical and intuitive for them to do so.”

Chief Executive Officer Reed Hastings emphasized that Netflix will stick with their no-ads policy and keep their focus on subscriptions.

“To grow a 5 or 10 billion dollar advertising business, you have to rip that away from … other providers — Amazon, Google and Facebook, which is quite challenging,” Hastings explained. “In the long term, there’s not easy money there.”

“We’ve got a much simpler business model, which is just focused on streaming and customer pleasure,” Hastings added. “So we think with our model that we’ll actually get to larger revenue, larger profits, larger market cap because we don’t have the exposure to something that we’re strategically disadvantaged at, which is online advertising against those big three, which over the next 10 years are just going to integrate incredible amounts of data about everybody that we’re not trying to have access to.”

In today’s earning report, Netflix announced that they reached 167 million global subscribers. The figure represents a 20 percent increase from last year. The company, which is switching to reporting numbers regionally, added that they had 61 million U.S. subscribers (up 420,000) and surpassed 100 million internationally for the first time (up 8.33 million).

Photo credit: Netflix Investor Relations YouTube Channel

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