When it comes to Netflix’s tactics, two major issues come up frequently. The first is whether binge or weekly viewing is better for the show, and the second is if Netflix needs to or wants to advertise. Jason Kilar, outgoing WarnerMedia CEO, believes that because Netflix has not yet incorporated advertising into its service, they are giving away an advantage to their rivals.
The discussion about advertising on Netflix, whether it’s through a new tier or otherwise, has been an ongoing one for years. Many industry leaders have long thought that it will eventually have to happen. Reed Hastings, co-CEO of Netflix, has long been adamant about the company having advertisements. In September 2020, Business Insider claimed that Hastings said the reason Netflix does not have commercials is because it’s “the greatest capitalism.”
Netflix has not yet responded to these comments, with senior vice president Spencer Neumann recently stating: “… that’s not something we’re planning on doing right now… We have a fantastic scalable subscription model, and while never say never, it isn’t in our plans.” HBO Max Boss Predicts Ads Are Coming to Netflix: Find Out Here.
HBO Max Boss Predicts Ads Are Coming to Netflix
We’ve seen a plethora of new think-pieces and analysts urging Netflix to get into the ad game in recent years as its growth has slowed. HBO Max added an ad tier last year, and Disney+ will have one later this year. Ad-tiers are also used by Hulu and Paramount +, among others.
HBO CEO Richard Plepler was asked about the future of HBO, and he had this to say during an April 19 appearance on CNBC’s Closing Bell: “The franchise value of our studio is so high that they’re going to be able to do things that are way more ambitious than anything we’ve done before.” Kilar went even further in a recent interview with Variety. The remarks were made during a comprehensive conversation held by Matt Belloni for Puck News’ The Town.
On a recent episode of HBO Max Off Camera, Kilar discusses the future of Netflix’s content in India, its competition from various streaming services, and how successful it’s been there. In one interview, Kilar talks about everything from HBO Max’s controversial “project popcorn” to the recent launch of CNN+ and the competitive streaming landscape.
Kilar characterizes the current situation as a “three-horse race” for a billion subscribers between Netflix, Warner Media, and Disney. The topic of ads came up when talking about the best way to grow.
“The key to a billion dollars isn’t just to charge a premium price that’s ad-free. The way you get there is by, of course, having an ad-free premium price version of your service, but also by providing a lower more attractively priced option that is possible because to the presence of well-implemented advertising.”
Kilar continued, “That’s not something that Netflix has not been willing to do. We, of course, couldn’t start it soon enough because we recognize that these things are all about people’s household economics and we want to make this service as affordable as possible to as many people on the planet.”
When questioned whether Netflix will ads in three years, Kilar responded “Yes they will absolutely get to that conclusion,” adding “I suspect the religion they currently have about not having ads will change in time because offering consumers lower price is a really good strategy.”
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