Netflix announced on Tuesday that it has poached two top executives from Snapchat's parent company, Snap Inc. to lead its advertising sales team. The new executives will aid Netflix's plan on creating a less expensive ad-supported option for viewers.
Netflix confirmed it hired Snap's chief business officer, Jeremi Gorman, as its new president of worldwide advertising. It also brought in Snap's vice president of ad sales, Peter Naylor, in the same role at the streaming service.
The hiring of these two veterans signals Netflix's commitment to building an ad-supported version of the company's streaming service, which is expected to launch next year.
"You have two executives that are incredibly well positioned to help Netflix move quickly," LightShed Partners partner Rich Greenfield told Reuters. "They have incredible relationships with brands and advertisers who will want to advertise on Netflix."
Snap revealed the departures of Chief Business Officer Jeremi Gorman and Vice President of Ad Sales for the Americas Peter Naylor. Gorman, a well-respected executive, was with Amazon.com for six years before joining Snap in 2018.
The news comes amid reports that Snap Inc. is planning on laying off roughly 20% of its employees starting on Wednesday.
Gorman oversees the worldwide sales team in charge of enterprise advertisers, while Naylor joined the company two years ago after assisting Hulu in expanding its robust ad-based subscription tiers. Naylor previously served as Hulu's senior vice president of ad sales for six years before joining Snap in 2020.
After posting its first quarterly membership drop in over a decade, Netflix announced in July it's plans to offer a less-expensive version of its streaming service with commercials. Netflix had 220.67 million global subscribers in the second quarter, a loss of nearly 1 million subscribers. The new executives will bring established relationships with advertisers looking to advertise on Netflix.
"It sends a message that Netflix is really serious about building an ad business quickly," Greenfield said.
Reuters contributed to this report.