Netflix is emphasizing that it will not introduce ads, saying that "when you read speculation that we are moving into selling advertising, be confident that this is false".
Will focus on viewer satisfaction
Speculation that Netflix is moving into advertising has been ramping up over the last few years, reaching new highs in the last couple of quarters.
Netflix is now reassuring subscribers that "this is false". The company says that it will not introduce ads but instead focus on "competing for viewer satisfaction".
- "We, like HBO, are advertising free. That remains a deep part of our brand proposition; when you read speculation that we are moving into selling advertising, be confident that this is false. We believe we will have a more valuable business in the long term by staying out of competing for ad revenue and instead entirely focusing on competing for viewer satisfaction," the company wrote in its earnings report.
Lower subscriber growth
In the second quarter of 2019, Netflix added 2.7 million new subscribers, which is the lowest level of subscriber growth in some time. New players such as Apple and Disney are gearing up to launch streaming services later this year, which could put additional pressure on Netflix.
The company, however, considers it merely a speed bump and expects to add 7 million subscribers in the third quarter of 2019.
Netflix points out that new content drives growth. Stranger Things 3 premiered just after the second quarter. In the second half of 2019, viewers can expect movies such as Martin Scorsese's The Irishman and Michael Bay's 6 Underground. Netflix is also bringing back Orange is the New Black, La Casa de Papelâ€‹ (â€‹Money Heist)â€‹, and The Crown.
In the second quarter of 2019, Netflix had net income of $270 million on revenue of $4.9 billion.