Netflix Execs Say Advertising Tier Is Off To “Solid” Start; Viewing Is On Par With Ad-Free Level, Will Account For 10% Of Company Revenue In Coming Years
deadline.comNetflix’s landmark entry into ad-supported streaming, which began last November, is off to a “solid” start and will soon bring in at least $3 billion in annual revenue, executives said. “The hardest step is that first step as you’re crawling,” Co-CEO Greg Peters said during the company’s fourth-quarter earnings interview.
Netflix’s decision to offer a cheaper, ad-supported tier stunned the industry last year, given the company’s adamant assertions that privacy issues and other concerns would keep them from doing so.
Although it is “ridiculously early,” Peters added, “we’ve learned a bunch already.” One important finding is that viewer engagement, he said, is “comparable to similar users on our non-ad plans.” Take rate and growth on the $7-a-month tier is also “solid,” Peters said, “due to incremental subs coming into the service because we have a lower price point.” He reiterated the company’s frequently articulated view that it does not expect customers to switch plans and cannibalizing the existing business of ad-free subscriptions. “We’re just getting started,” Peters said. “We’re constantly improving and we see the trajectory ahead of us.” The comments followed the company’s report of fourth-quarter earnings, whose highlight was a sharp increase in new subscribers, well ahead of Wall Street analysts’ growth estimates.
Along with the numbers, the company said Peters, formerly COO and head of product, has been installed as Co-CEO along with Ted Sarandos, who has held the title since 2020.
Read more on deadline.com