Netflix CEO Reed Hastings has announced that he is considering a cheaper, advertising-supported (AVOD, Advertising Video on Demand) subscription offer already used by Hulu, HBO Max, Peacock, Paramount + and upcoming Disney + platforms .
We do not know if this possibility is linked to Netflix ‘s decline in performance , a missed target and loss of subscribers, in the first quarter of 2022.
At the end of his quarter-end interview, Hastings said:
“Those who have followed Netflix know that I have been opposed to the cumbersome advertising and a huge fan of the simplicity of the subscription. But as much as I am a fan of this, I am a bigger fan of consumer choice. And allowing consumers who would like to have a lower price and are tolerant of advertising to get what they want makes a lot of sense. “
In Italy the subscription starts at € 7.99 (SD), € 12.99 (HD) while in the USA at $ 15.49 per month. Analysts speculate that in the second quarter the company could lose another 2 million subscribers and the drop in prices would allow for greater loyalty, especially from casual subscribers.
Company CFO Spencer Neumann previously said at Morgan Stanley’s investment conference in March:
“It’s not like we have an anti-advertising religion, to be clear. It is not something that is in our plans right now ”. But she added: “Never say never”.
If Netflix goes this route, how will subscribers react?