Netflix’s Reed Hastings Credits Hulu for Advancing Ad-Supported SVOD Business Model

Reed Hastings, co-founder and co-CEO of Netflix, now wishes the streamer had launched an ad-supported plan years ago. Speaking Nov. 30 at the New York Times’ Dealbook confab in New York City, Hastings said the service has two mantras: customer satisfaction and strong operating income. He said senior management (i.e., himself) failed to realize growing consumer demand for a lower-priced ad-supported plan.

“You’re right to say I didn’t believe in the ad-supported tactic for us,” he said. “And I was wrong about that.”

Netflix launched its ad-supported subscription streaming VOD plan on Nov. 3, less than six months after hastily announcing plans to reverse more than a decade of steadfastly refusing to sell commercials to subscribers in the form of a lower-priced service option.

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Hastings contends the proof that an ad-supported SVOD option could work was right in front of him all along. The executive said Hulu, which launched an ad-supported option on day one in 2007, proved that a streaming service could operate an AVOD service at scale, offering consumers lower prices, which would translate into a better overall business model.

In fact, it wasn’t until Netflix missed its first-quarter subscriber growth projection at the end of March this year that Hastings told investors about a plans to launch an AVOD tier in early 2023. With Disney planning to launch a lower priced ad-supported option for Disney+ on Dec. 8, Netflix expedited the launch of its plan.

“So we did switch on that, and credit to Hulu and [former CEO] Jason Kilar for figuring that out,” Hastings said, adding that he failed to see that larger percentages of the coveted 18-49-year-old demo were transitioning to connected televisions and away from linear TV — with advertisers in pursuit.

“We didn’t have to steal away the advertising revenue; in fact, it was pouring into connected TV,” he said. “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.”

The Post


Box Office $81.88 million;
$29.99 DVD, $34.99 Blu-ray, $39.99 UHD BD;
Rated ‘PG-13’ for language and brief war violence.
Stars Meryl Streep, Tom Hanks, Bob Odenkirk, Carrie Coon, Bruce Greenwood, Jesse Plemons, Sarah Paulson, Tracy Letts, Bradley Whitford, Matthew Rhys, Alison Brie, David Cross, Zach Woods.

Even before seeing the movie, the obvious question surrounding The Post is why the filmmakers would decide to focus a story about the publication of the Pentagon Papers on the efforts of The Washington Post newspaper when the bulk of the material was broken by The New York Times.

After watching it, though, it’s a lot easier to understand some of the reasons director Steven Spielberg guided the film along the approach it took.

For one, there just seems to be much more storytelling to mine from the Washington Post perspective, whereas a Times POV would likely have been a more straightforward legal drama about the relationship between the press and government.

At the time, the Post was still seen as primarily a local D.C. publication without the broad national following it has now. Financially strapped, the paper issued an IPO that could have been threatened by any legal troubles encountered as a result of publishing the leaked documents copied from a classified report that exposed government deception in the conduct of the Vietnam War.

And that’s on top of the expected discussions of the role of journalism in a democracy and defending the First Amendment against government pushback, with the Times included in all those story points anyway.

There’s also an argument to be made that the primary interest of the film isn’t even about the Pentagon Papers to begin with.

Certainly, looking at the film from the prism of the Pentagon Papers as the subject matter makes it seem like it’s the story of a minor newspaper jumping on the bandwagon of a bigger newspaper to gain stature.

But keeping a bigger picture in mind, the film is much more about how the Post rose in prominence under the leadership of publisher Katharine Graham (Meryl Streep) and editor Ben Bradlee (Tom Hanks), and that the Pentagon Papers just happened to be the catalyst.

From Spielberg’s perspective, it probably didn’t hurt that this approach also allowed him to devote significant screen time to Graham in depicting the ascension of a female publisher in a man’s world.

Spielberg also seems interested in positioning the film as a prequel of sorts to All the President’s Men, showing how the Post became the paper that drove coverage of the Watergate break-in.

As such, The Post is more fascinating for its procedural aspects and character dynamics for any actual history it’s trying to explore. The film also sees itself as an allegorical commentary on criticism of President Trump’s relationship to the media, and his tendency to label detractors as “fake news,” but these aspects of the film are really only going to appeal to choirs expecting to be preached to. One could be completely oblivious to such perceived messaging and still find the film immensely entertaining. The performances are terrific and the nitty-gritty details of classic print journalism are just fun to see, particularly contrasted with the digital simplicity of today.

The Blu-ray includes a number of good behind-the-scenes featurettes that detail the making of the film and explore the real-life circumstances being explored. This being a Spielberg movie, there’s also a featurette about the music composed by longtime collaborator John Williams, this being their 28th film together.