Another factor that has encouraged Netflix to explore a plan with advertising is the excellent acceptance that this type of subscription has had by its competitors. hbo max already offers a free subscription with advertisingwhile Disney Plus also plans to introduce a cheaper membership. The latter is expected to be available in much of the world in 2023.
“It’s pretty clear it’s working for Hulu, Disney is doing it, HBO did it. We have no doubt that it works.” Hastings added.
Given privacy concerns about any ad-supported subscription, Netflix understands that it does not intend to use a tracking system to collect data:
“In terms of earning potential, the internet advertising market has definitely moved on, and now you don’t have to incorporate all the information about people that you used to incorporate. We can stay out of that and really focus on our members, creating that great experience,” he concluded.
Losing 200,000 users is not the only thing that worries Netflix. The company expects to lose 2 million subscribers in the fiscal quarter due to a significant slowdown in its growth. Offering a cheap subscription is part of the strategy to try to stop the decline.