Netflix doesn't rule out introducing ads, one day...

Mike Wheatley

Netflix Chief Financial Officer Spencer Neumann said his company has not ruled out the possibility that it might one day introduce a cheaper ad-supported subscription tier for its streaming service.


Neumann said at a recent investor conference that the company is taking a “never say never” attitude to the idea of introducing ads. However, he clarified that such a move is not currently in the company’s plans.

The Netflix executive was asked about the possibility following the recent announcement by Disney that it will introduce an ad-supported tier for its Disney Plus service later in the year.

“It’s not like we [Netflix] have a religion against advertising, to be clear,” Neumann said at Morgan Stanley’s 2022 Technology, Media & Telecom Conference. “But that’s not something that’s in our plans right now. We have a really nice scalable subscription model, and again, never say never, but it’s not in our plan.”

While it seems clear that an ad-supported version of Netflix won’t be arriving any time soon, Neumann’s comments seem to indicate a reversal of the company’s often-stated aversion to ads. Perhaps, the admission that it might one day allow ads suggests the company may be wary of its rivals expanding their user base by adapting their business model.

Neumann admitted that its “hard for us to ignore that others are doing it.” However, he made it clear that “for now it doesn’t make sense for us.”

Disney’s decision to introduce an ad-supported tier to its platform comes in the wake of a similar move by HBO, which added a cheaper, ad-supported tier for HBO Max in 2021.

For $9.99 per month, HBO Max offers access to the same library of movies and TV shows on its platform as its standard tier, though users must tolerate ads and they are not allowed to download content to watch offline or watch streams in higher quality than 1080p.

Disney hasn’t yet said how much its ad-supported tier will cost. While some services allow free access through an ad-supported model, Disney will not go to such extreme lengths when it’s new tier launches in the second half of the year. Most likely, it will have similar restrictions to HBO Max’s most affordable subscription plan.

Recently, it has been reported that Netflix is facing pressure from its investors to introduce a lower-cost subscription as a way to boost revenue. Reuters said Netflix’s rate of new subscriber acquisitions has slowed over recent quarters, impacting the company’s share price.

So while Netflix will likely stick to its guns for now, the allure of ad-revenues may one day prove too strong for the company to resist.