Netflix has never advertised or commercially, according tomedia BGR. Reed Hastings, Netflix’s chief executive, said the service had been avoiding advertising because “the consumer market is growing much faster than advertising”. Hastings is not opposed to advertising at the “philosophical” level, he simply believes that advertising is not in the best interests of the business he runs.
More than two decades after its inn, Netflix remains the most watched streaming platform, but competition remains fierce. Last year alone, Disney, NBC and HBO launched new services to compete with the likes of Hulu, Netflix and Amazon Prime Video, all of which have their own business models and original content.
Netflix has previously made it clear on several occasions that it will never bring ads into its service. Earlier this week, Variety interviewed Reed Hastings, Netflix’s CEO and co-founder, about his new book, Ruleless Rules: Reinventing Netflix’s Culture, and the company as a whole. One of his most interesting words in the interview was in response to a question about advertising on Netflix.
“It’s definitely not a rule. This is a judgment. Regarding not allowing ads to appear on Netflix, he said: “It’s a belief that we can build a better business, a more valuable business (without advertising). You know, advertising looks easy until you get into it. Then you realize that you have to get rid of that revenue from other places because the advertising market is not growing, and in fact it’s shrinking now. To get people to spend less on ABC and more on Netflix, it’s a ‘meat fight’. The consumer market is growing much more than the advertising market, which is flat. “
“We went public 20 years ago at about $1 a share, and now we’re (more than) $500 a share,” Hastings added, explaining that the company had been successful without advertising. “So I would say our subscription-centric strategy has been very successful. But this is basically what we think is best for capitalism, not philosophical stuff. “