by Justin Lyons
Netflix co-founder and co-CEO Reed Hastings sat down with Variety recently to discuss his new book and everything regarding Netflix. From business strategies to hiring strategies to creative strategies, Hastings seemed to be quite open about his ideas for the streaming service.
One of the biggest questions everyone seems to have about Netflix revolves around its revenue strategy. The home of shows like “Stranger Things,” “Orange is the New Black,” “House of Cards” and other award-winning, binge-inducing shows has been ad-free since its inception.
Hastings said the decision to rely entirely on a subscription model is more of a judgement call than a strict rule for Netflix.
“You know, advertising looks easy until you get in it. Then you realize you have to rip that revenue away from other places because the total ad market isn’t growing, and in fact right now it’s shrinking,” Hastings told Variety.
Hastings went on to say there’s more opportunity for growth in the consumer market than there is in the advertising business, also citing 20 years of success to back his point.
A 2019 report from eMarketer said Google, Facebook and Amazon received upwards of two-thirds of advertising dollars in the United States, so it would make sense to believe the room for growth in advertising is limited.
The New York Times reported in April that Netflix gained nearly 16 million subscribers early in the year, pushing the total number of subscribers to more than 182 million.
Hastings also touched on production during COVID-19’s shutdown, saying Netflix was able to shoot some originals, like the fourth season of “The Crown,” before shutting down production. He added that Netflix is currently producing in Europe and Asia.
While producing in Europe and Asia is more practical than producing in the United States right now, it also goes along with goals Hastings has for Netflix.
He said he wants Netflix to become a first-class developer all around the world, not just in Hollywood. Hastings said shows like “Dark,” from Germany, and “La Casa de Papel,” from Spain, have aided that movement.
On the future of Netflix, Hastings said, “What’s next is becoming a great Turkish developer of content, becoming a great Egyptian developer of content and sharing that with the world.”
He closed the interview with a discussion about other streaming platforms. Hastings compared Netflix to Starbucks, serving a specific product, while Amazon is more of a Walmart, serving every need.
With the number of streaming services growing exponentially, it might be easy to assume doom for the original streaming platforms. Even with Disney+ reaching 60 million subscribers, Hastings isn’t worried, calling the streaming industry a “healthy situation.”
“Because you’ll continue to push each other to innovate and entertain people. It’s only in the old communist states of the 1960s when you’d have a single network. No one wants to create that,” Hastings said.
A rising tide lifts all boats, right? There is no doubt that Netflix remains king of the streaming industry, and we can probably assume we’re safe from ads on Netflix for now. That, along with the possible development of more content from other countries and cultures, makes it an exciting time to be a Netflix subscriber.
For now, we’ll continue to rely on Netflix’s ad-free experience while studios that rely on theatrical releases are slowed down.
To read the entire interview from Variety, you can click right here.