The CEO of streaming giant Netflix made it clear once again that the platform has no interest in ad placement. This is amid speculation that the platform might launch a version of its streamer that includes ads in order to compete against the widening competition. Instead, Netflix intends to avoid the drawbacks of collecting consumer data for targeted advertising.
Netflix Chairman and CEO Reed Hastings laid the rumors about the platform being ad-supported to rest. Hastings sat down for an interview with Guggenheim Securities’ Michael Morris at the company’s fourth-quarter 2019 earnings announcement.
“Google and Facebook and Amazon are tremendously powerful at online advertising because they’re integrating so much data from so many sources,” he told Morris after being asked about the matter. “I think those three are going to get most of the online advertising business.”
According to Hastings, growing Netflix into a USD5 billion to USD10 billion ad business will require ripping away from incumbents. “Long term, there’s not easy money there,” he added.
This decision comes a strategic gain. Without targeted ad placements, the streamer is safe from being exposed to data-privacy issues and related controversies — something that can’t be said for social media platforms currently in hot water over issues of a data privacy breach.
The CEO says that their simple business model of focusing on “streaming and customer pleasure” will rake in much more earnings than if they were to be dependent on ads. Hastings noted that Netflix doesn’t want anything to do with “the controversy around exploiting users with advertising.”