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Investing.com — After Disney+ announced its ad-supported subscription tier, Netflix Inc (NASDAQ:NFLX) revealed it has no plans to provide the same for its consumers, TechCrunch reported on Thursday.
Netflix shares are up 1% Thursday.
Speaking at The Morgan Stanley (NYSE:MS) Technology, Media and Telecom Conference, Netflix CFO Spencer Neumann is said to have explained that Netflix is not against advertising, but the company currently has no plans for the model. Neumann was quoted as saying it is “not something that’s in our plans.”
Questions were put to the Netflix CFO about advertising potentially decreasing the entrance price for Netflix’s service and allowing it to compete as it grows into global markets where pricing may be sensitive to countries.
However, Neumann defended the current model, focusing on “optimizing for long-term revenue” and giving the best possible experience to customers.
The dilemma Netflix faces with a potential ad-supported model is that while it may help reduce a subscription cost, it will also potentially negatively impact the end-user experience.
However, the CFO did state that an ad-supported model is a possibility as long as the goal of offering users the best experience is not tarnished.
TechCrunch quoted Neumann as saying, “right now, we think we have a great model and a subscription business that scales globally really well.”
“We were about a $20 billion revenue business two years ago… we’re $30 billion revenue now. The growth is healthy across every region of the world.”
Consumers debate Netflix’s strategy, with some arguing that near-term growth is the best option, especially after the firm failed to meet Wall Street’s subscriber growth forecasts for Q4. Furthermore, Netflix has had to contend with ever-rising competition in recent years.
In other Netflix news Thursday, the company is raising prices in the U.K. and Ireland for the second time in less than 18 months, according to a report by Reuters. The company is set to raise the price of its most popular subscription plan, which allows customers to watch on two screens at once, to £10.99 per month in the U.K. Netflix’s premium plan will rise to £15.99 per month while the entry-level plan will move to £6.99.
