Netflix considers advertising as subscriptions hit headwinds

Chris Pash
By Chris Pash | 20 April 2022
Credit: Rayson Tan via Unsplash

Netflix has finally decided it is open to having advertising on its streaming platform.

CEO Reed Hastings: “Those who have followed Netflix know that I have been against the complexity of advertising and a big fan of the simplicity of subscription.

“But as much as I am a fan of that, I am a bigger fan of consumer choice, and allowing consumers who would like to have a lower price and are advertising-tolerant to get what they want makes a lot of sense.”

He indicated that such an option might not be a year or two away. 

Revenue growth has slowed considerably at Netflix with high household penetration, accelerated during COVID, creating headwinds.

The company posted an unexpected fall net subscribers in the March quarter. Paid net additions were down about 200,000 to 74.58 million in the three months compared to guidance forecast of plus 2.5 million and 4 million in the same quarter a year ago.

Netflix has 221.64 million global subscribers.

And revenue came in at $US7.868 billion for the three months, below expectations.

According to its first quarter earningsreport: "Our revenue growth has slowed considerably as our results and forecast below show.

"Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally.

"However, our relatively high household penetration - when including the large number of households sharing accounts combined with competition, is creating revenue growth headwinds." 

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