Could Netflix ever become a totally free streaming service? The company’s leading executives say the possibility exists, but should the switch ever be made, it would require an ad-supported model.
On the company’s fourth-quarter earnings call, co-CEO Ted Sarandos was asked if the ads option, known as ‘FAST’, is on the table. He confirmed that it is definitely being considered, along with several other options.
“We’re open to all these different models that are out there right now. We’re keeping an eye on that segment, for sure,” he said.
Of course, a free-to-use Netflix may not happen anytime soon, since the company has other important things it would like to focus on this year. Sarandos shared that they are currently working on paid sharing (that is, cracking down on password sharing) as well as the launch of advertising.
Greg Peters, Sarandos’ co-CEO, didn’t go into much detail about the ad tier, but he did mention that it was showing promise. According to their data, Netflix subscribers to the ad tier have been engaging with the streaming service’s content at a similar level as standard tier users.
“That’s really a promising indication. It means we’re delivering a solid experience and it’s better than we modeled and that’s, you know, a great sort of fundamental starting point for us to work with,” he added.
Peters also mentioned that Netflix is taking notes from Hulu, which has seen much success with advertising. The hope is that Netflix, with its 230 million subscribers worldwide, can eventually surpass Hulu in that area.
For now, subscribers will have to choose from one of three price plans to access Netflix: Basic at $9.99 per month, Standard at $15.49 per month, and Premium at $19.99 per month.
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