Advertising on Netflix would be a boon to marketers and media buyers

“Those who have followed Netflix know that I have been against the complexity of advertising and a big fan of the simplicity of subscription,” co-CEO Reed Hastings said. 

Give advertising-tolerant consumers a choice

“But as much as I am a fan of that, I am a bigger fan of consumer choice, and allowing consumers who would like to have a lower price and are advertising-tolerant to get what they want makes a lot of sense.”

The advertising industry seems to have reacted positively to the news. In Australia, the Sydney Morning Herald reports that media buyers expect Netflix to become a significant force in the local advertising market if it adopts cheaper, ad-supported subscriptions.

“[Advertisers] are falling over themselves about Netflix,” Joe Frazer, Managing Partner at media agency Half Dome, told the newspaper, adding that advertisers would likely flock to the platform due to its large audience base and its strong reputation among consumers.

“Video-based advertising is just the biggest growth area at the moment, based on audiences shifting their consumption of content from linear to [broadcast video on demand] and streaming platforms,” he said.

Meanwhile, business magazine Forbes reports that, with an ad-supported tier, Netflix will potentially open its content to more users of different economic backgrounds who couldn’t afford Netflix previously. 

“This becomes even more important outside of wealthy countries like the US, as today’s streaming marketplace looks vastly different from five years ago,” Forbes said.