Netflix's co-CEO explains the controversial design to pursue a subscription tier that includes ads after resisting them for over a decade

May 31, 2022

ted Serandos — Jemal Countess/Getty Images for IFP

The NYT interviewed Netflix's co-CEO, Ted Sarandos, amid big changes at the company.
He discussed the likely impending advertising model with the outlet.
"For us, it was all about simplicity... I think it can now withstand some complexity," he told the outlet.

There's been a lot going on at Netflix, from layoffs to a market rout, and the plan is that there will soon be more: a lower-price, ad-supported subscription option, which Netflix's co-CEO, Ted Sarandos, discussed in a recent interview with New York Times columnist Maureen Dowd.

"For us, it was all about simplicity of one product, one price point," Sarandos told Dowd. However, "I think it can now withstand some complexity," he added to the outlet.

Netflix had pushed back against an advertising model for years and focused on subscribers. Dowd asked Sarandos if he thought the lack of diverse revenue sources hurt the company of late.

"I think it's the trade-off of simplicity and complexity," he said. "And to do what we did in the last 10 years, I think we benefited much more from simplicity."

The road to an advertising business for Netflix could be rocky, Insider has previously reported.

The company has not licensed its shows for streaming and advertising, and it would have to be more open around its data to woo advertisers, Steve Shannon, CEO of Swerve TV and a former exec at Roku, said in March, Insider previously reported.

On the earnings call that sent Netflix's stock tumbling in April, Hastings was cheerful about the ad tier, Insider noted.

"I think it's pretty clear that it's working for Hulu. Disney's doing it, HBO did it. I don't think we have a lot of doubt that it works, that all those companies have figured it out," he said. "I'm sure we'll just get in and figure it out, as opposed to test it and maybe do it or not do it."

The Times profile comes amid unprecedented times for the company. Netflix reported a subscriber loss for the first time in over 10 years on its earnings report in late April. Since then, the stock has fallen about 43%.

Netflix has also laid off 150+ people and even dropped a planned animated show with Meghan Markle.