3 Reasons Netflix Should Get Into Advertising

For almost as long as Netflix (NASDAQ: NFLX) has had a streaming service, investors and analysts have asked if the company will get into advertising. Every time, Netflix has always given the same answer: hard pass.

Netflix CEO Reed Hastings appreciates the simplicity of the streamer's business model, seeing its simple value proposition as a strength. From a consumer perspective, it's very easy to understand how Netflix works. You pay a monthly fee, and you get all the entertainment you want with no ads. He also seems to think advertising would distract from the company's focus on pleasing customers, and potentially attract controversy over data collection, as he said in the earnings call in January 2020. He also believes that competing with ad heavyweights like Alphabet's Google and Facebook would be difficult, as Netflix would have to essentially take market share from them.

However, the streaming universe has evolved considerably since then, and Netflix needs to be open to updating its business. It faces new competition from a wide range of legacy media companies and others, including Walt Disney's Disney+, Apple's Apple TV+, Comcast's Peacock, HBOMax from AT&T, Paramount+ from ViacomCBS, and Discovery Communications' Discovery+.

Source Fool.com