Reed Hastings admitted Wednesday that Netflix Inc. should have launched an ad-supported tier years ago.
During an interview at the New York Times’ Dealbook conference, the Netflix co-founder and co-chief executive said that for years, he thought of advertising all wrong.
““I didn’t believe in the ad-supported tactic for us. I was wrong about that.””
“I didn’t believe in the ad-supported tactic for us. I was wrong about that,” he told moderator Andrew Ross Sorkin. “Hulu proved you could do that at scale and offer customers lower prices… I wish we had flipped a few years earlier on that, but we’ll catch up.”
After years of dismissing calls to bring advertising to Netflix, the streaming-video company finally added a cheaper, ad-supported tier in October in an effort to revive stagnant user growth.
Hastings said he had been too focused on how Facebook and Google were disrupting the advertising market.
“What I failed to understand is that there is a lot of TV advertising that now couldn’t find the viewers because the 18- to 49 segment had moved on and were not watching linear TV,” he said. “We didn’t have to steal away the advertising revenue. It was pouring into connected TV. The inventory was there.”
Netflix shares NFLX, +8.75% have fallen about 50% year to date, but have gained 37% over the past three months, compared to the S&P 500’s SPX, +3.09% 14% decline in 2022 and 3% gain over the past three months.
Hastings also heaped praise on Twitter owner and Tesla Inc. TSLA, +7.67% CEO Elon Musk, calling him “the bravest, most creative person on the planet.”
“I’m 100 percent convinced that he is trying to help the world,” Hastings said of the world’s wealthiest individual, who has spent much of the past month trolling his critics on Twitter and gutting the social-media company’s workforce.