Netflix Remains Adamant About Being Ad-Free, Despite Speculation from Competitors
Netflix confirmed yesterday that despite what competitors and industry experts are saying, the service has no plans to include ads now or in the future.
On a panel at Cannes in June, Peter Naylor, Hulu’s Head of Ad Sales, and Linda Yaccarino, NBCU’s Ad Chief said the high cost of originals, combined with the growth of ad-supported services will lead Netflix to start including ads. Naylour argued that because there is no guarantee that original content will be a hit, streaming services have to mitigate costs and unless Netflix is willing to continue hiking prices, ads will be the next best thing.
Yaccarino also pointed out the fact that ad-supported media can incorporate interactive advertising or non-intrusive advertising and doesn’t have to necessarily adhere to the traditional format of ad-placement.
Netflix on the other hand, is adamant in ensuring that their platform will remain ad-free. In a statement released as part of their second-quarter announcement, Netflix stated, “We, like HBO, are advertising free. That remains a deep part of our brand proposition; when you read speculation that we are moving into selling advertising, be confident that this is false. We believe we will have a more valuable business in the long term by staying out of competing for ad revenue and instead entirely focusing on competing for viewer satisfaction.”
For Netflix though, the revenue from ads may be too hard to pass up. 70% of Hulu subscribers pay for their Limited Commercials plan ($5.99) — which generated $1.5 billion in ad revenue in 2018. So while nothing is imminent for Netflix subscribers, it sure seems like their competitors think that an ad-supported version of Netflix is all but inevitable.