As Amazon nears the start of its new ad program, which will require Prime Video users to pay an additional $2.99/month if they want to avoid commercials, Netflix has revealed that the streaming platform almost implemented a similar approach. Netflix Co-CEO Greg Peters made the admission during the company’s Q4 earnings call on Tuesday.
“We did consider making advertising the default option,” Peters told investors. “But given our long history of not having ads, we thought it was better for members, rather than forcing them into a change and get them mad.”
Peters further expanded on why Netflix ultimately chose to go a different direction than Amazon.
Via Deadline:
Prime Video, which Peters did not name in his answer, requires customers to pay $3 a month extra to not see any ads on original programming. Netflix concluded it was “better to attract them to the advertising plan … based on the benefits: more streams, higher-resolution downloads and, of course, lower price,” Peters said. A bit more than a year since launch, he continued, “that approach is generally working well for our members and we haven’t seen any big backlash, which is a positive as well.”
However, while Netflix might not be forcing users to pay extra to avoid ads, it is starting to limit their options. The streaming platform recently confirmed that it’s doing away with its cheapest ad-free plan known as Basic. Users will then have to choose between the $6.99 Standard plan with ads or jump all the way up to the $15.49 Standard plan without ads. Either way, Netflix benefits from either pulling in more ad-revenue or collecting a higher subscription rate.
(Via Deadline)