Netflix's Hastings: Should have gotten into advertising sooner
Ore Huiying

Netflix (NASDAQ:NFLX) co-CEO Reed Hastings was once famously steadfast about the company's pioneering streaming service remaining free of ads. It took a reversal in subscriber growth to start to change his mind - and now he says he regrets not introducing an ad-supported version sooner.
Netflix stock (NFLX) joined in a broad afternoon rally to finish up 8.8%, hitting a two-week high.
"We have two religions - customer satisfaction and operating income - and everything else is a tactic," Hastings told the NYT's
DealBook conference.
"You're right to say I didn't believe in the ad-supported tactic for us. And I was wrong about that; Hulu really proved that you could do that at scale, and offer consumers lower prices, and that that was a better model," Hastings said. "So we did switch on that, and credit to Hulu and Jason Kilar for figuring that out."
"And I wish we had flipped a few years earlier on it, but we'll catch up, and in a couple of years we won't remember when we started it," he added.
There's a chunk of TV advertising that couldn't find viewers, he said, because "the 18-49 segment had moved online. They were not watching linear TV." He said he missed that advertisers are desperate for connected TV, and "we didn't have to steal away the advertising revenue; in fact, it was pouring into connected TV if the inventory is there."
He had previously been focused on Google (GOOG) (GOOGL) and Facebook's (META) ability to offer higher CPMs due to reliance on data, and "mop up the world" - which they have in non-TV advertising, he noted.
Netflix's major ad partner is Microsoft (MSFT), which spurred industry chatter about a potential takeover of the streamer by the software giant - but Hastings said that's not in the cards: âItâs not normal to do commercial deals with companies youâre trying to acquire. It makes things more complicated, not less. So that was like zero of the motivation."
Hastings also emphasized Netflix's (relatively small so far) investment into videogaming - repeatedly coming back to the subject that the company wants to make great TV shows, movies, and games. Peter Kafka notes that when asked about a much-discussed potential interest in sports, Hastings said âTalk to us after weâre a big leader in games. We have a lot of investment to do in games.â
Netflix looks to be hiring up to build a high-profile, premium PC videogame.