Netflix wants to make it very clear that they will not be implementing commercials on the streaming service – ever.
A big part of the streaming service’s appeal has been that it is ad-free, and that strategy has long been a part of its mission statement to investors – no pay-per-view or ad-supported content, only flat-fee unlimited commercial-free viewing.
However in recent months there has been a push by external forces to get ads on the system, mostly in the form of a ‘free with ads’ tier, suggesting it could add a billion or so to the company’s revenues and shore up its rather high level of content spending.
On Wednesday though, as part of announcing Q2 2019 earnings, Netflix spelled it out in no uncertain terms that those pushing to put ads on the service can buzz off. In a letter to investors they said:
“We, like HBO, are advertising free. That remains a deep part of our brand proposition; when you read speculation that we are moving into selling advertising, be confident that this is false. We believe we will have a more valuable business in the long term by staying out of competing for ad revenue and instead entirely focusing on competing for viewer satisfaction.”
CFO Spencer Neumann says their only plan now is to increase the scale of their current 151 million user base: “Our calculus now for building a global network is that we’re best served to focus on that single revenue stream… and offer [the service] at a reasonable price. We think the subscription model is a terrific model for us.”
The company also released statistics for some of their recent premieres with original docuseries “Our Planet” watched by 33 million households, Ava DuVernay’s four-part original series “When They See Us” reaching 25 million households in four weeks, and “Dead To Me” being seen in 30 million households in its first month.