Netflix warns of crackdown on password sharing: Here's what it means for viewers.
This model could expand to other countries, executives said during the company's earnings call on Tuesday, but it was unclear when those changes would be enforced.Netflix co-founder Reed Hastings has long resisted supporting ads, but the company reversed course Tuesday.
Hastings attributed the decision to embrace an ad-based subscription model to Netflix’s competitors, suggesting that the streaming service could outsource the ad-targeting. The move to ads was greeted with skepticism by some Wall Street analysts, including Rich Greenfield, partner and media and technology analyst at LightShed Partners. He said adding advertisements would likely result in lower-watch-time-per user-per-day and ultimately higher user turnover.
“We’re pulling back on some of our spend growth across both content and noncontent spend,” CFO Spencer Neumann said in a recorded interview. “We’re trying to be smart about it and prudent in terms of pulling back on some of that spend growth to reflect the realities of the revenue growth of the business.
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