Office Hours: Crisis Management 101, Ad-Supported Streaming Tiers, and Achieving Economic Security

Netflix's Strategy

Scott Galloway critiques Netflix's recent introduction of an ad-supported tier, highlighting its potential negative impact on the brand and user experience. He argues that the essence of Netflix, much like HBO, lies in its uninterrupted storytelling, which is compromised by ads. Scott predicts that the ad-supported tier may not succeed, as only 0.2% of U.S. Netflix subscribers opted for it in its first month 1.

The key to Netflix, and the exciting thing about HBO, is that it is uninterrupted storytelling.

--- Scott Galloway

He believes that the introduction of ads directly attacks Netflix's brand identity and diminishes the quality of its content 1.

   

Hulu's Positioning

Scott Galloway examines Hulu's ad-supported tier, noting its significant subscriber base but questioning its long-term viability. He describes Hulu as lacking a distinct identity compared to competitors like Disney and Netflix, which have clear brand centers of gravity 2. With 57% of Hulu subscribers on the ad-supported plan, Scott suggests that Hulu has captured a market segment willing to endure ads for a lower price.

Hulu doesn't really have a center of gravity.

--- Scott Galloway

He speculates that Hulu might eventually be absorbed into another platform due to its lack of differentiation and reliance on ad revenue 2.