With the arrival of new major players in the streaming market, Netflix may be tempted to turn to advertising to quickly multiply its revenues. A rumor that comes up regularly. Fortunately, there is still no question for the boss of the streaming service, Reed Hastings.
The boss of Netflix returned to the subject when communicating the company's results for the 4th quarter of 2019. Results which have proved positive for Netflix with an increase in turnover, + 31% over one year , or $ 5.47 billion and $ 587 million in net profit. Its number of users has also increased.
Advertising, a solution?
For many, integrating advertising would be a simple and easy solution for Netflix to earn money. An opinion that does not share the boss of the service: "there is no easy money to be made" with advertising. According to Reed Hastings, this would be a waste of time in the face of giants such as Google, Facebook or Amazon, which are taking the lion's share. For the boss of Netflix, "Google, Facebook and Amazon are extremely powerful for online advertising because they integrate so much data from many sources. This is a commercial cost, but it also makes advertising more targeted and effective. So I think these three players will take over most of the online advertising market. ”
Reed Hastings points out that Netflix is based on "a much simpler business model, just focused on streaming and customer enjoyment". The boss also stressed that he formally objected to the collection of personal data from its users. "I don't want to exploit our users," he said, adding, "We don't collect anything."
A statement that is true about targeting advertising - since there is none on the platform - but in reality, Netflix collects a lot of data on the behavior of its users. In addition, Netflix's algorithms analyze the content that its users consume in order to offer them series and films suited to their tastes.
Last summer, the streaming platform had already been very clear about the introduction of advertising into Netflix, telling shareholders: "When you read speculation that we are moving towards the sale of advertising, be sure that this is wrong. We believe that we will have an activity with more long-term value by avoiding competition for advertising revenue and by focusing entirely on competition for the satisfaction of spectators ”.
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