Confirmed: Ads are coming to Netflix
Netflix co-CEO Ted Sarandos has confirmed what has been an open secret for some time; Ads are coming to Netflix.
According to the Hollywood Reporter, Sarandos confirmed the leaked reports in the second week of May and revealed that a cheaper, ad-supported tier of Netflix is on the way.
In this regard, things have moved quickly for Netflix in 2022. In early March the company’s chief financial officer, Spencer Newman, was asked about the possibility of an ad-supported level and would only say that he “can’t say never” when asked about the idea, So fast before adding that it’s “nothing” [the brand’s] There’s a plan now.”
Then, on April 20, during an earnings call, Sarandos’ partner-in-crime, Netflix’s other co-CEO Reed Hastings, revealed that the streaming service was then “quite open” to the possibility of ad-supported levels and “figures out.” “Could have done it. It will be over in the next one or two years.”
Now though the ads are coming, Sarandos said on stage at the Cannes Lions, the five-day industry festival that’s taking place right now, that he wanted to gain “a bigger customer segment.” They also confirmed that the tier will be a separate offering and ads will not appear on existing customers’ Netflix accounts.
When asked about commercials on the platform, Sarandos said: “We’ve left a huge subscriber segment off the table, people who say: ‘Hey, Netflix is too expensive for me and I don’t mind advertising. We Adding an ad tier, we’re not adding ads to Netflix as you know it today. We’re adding an ad tier for people who say ‘Hey, I want a lower price and I’ll watch the ad’. ‘”
He didn’t give any details about when the commercials would hit Netflix, but, if previous reports are accurate, it will happen before the end of 2022.
Sarandos was also upbeat about the company’s prospects, saying that Netflix has “… lots of scale, and profitability, and free cash-flow to continue this business.”
The move comes as Netflix wins back subscribers whose monthly subscription costs have increased by several, and attracts those who haven’t yet given up on Netflix.
It is also looking to increase revenue after announcing in late April that it had lost 200,000 customers since early 2022, and as a result, saw its value drop by more than $70 billion.
An ad-supported, low-priced tier for a subscription service isn’t a revolutionary idea. Hulu, HBO Max, Paramount Plus and Peacock have already done it, and Disney Plus will bring the option this year as well.
Analysis: A new level move, right?
This was the only way for Netflix to roll out commercials on its platform without causing a tidal wave of anger among its existing subscribers. The idea that customers receiving the streaming service’s original offering would accept the prospect of commercials suddenly appearing halfway through an episode of Stranger Things is delusional.
Sarandos has only confirmed the fact that there will be ads, he hasn’t said how much the ad-supported subscription tier will cost, how often the ads will appear and how long the commercial breaks will last. In all likelihood, this is because Netflix executives haven’t decided on that either.
There have been reports in the past week of Netflix meeting with the likes of Google, Roku and Universal parent company Comcast as they try to map out our plans to include ads on the service.
At first glance, Netflix would be highly attractive to advertisers, with more than 220 million subscribers worldwide and a large amount of customer data to allow ads to be accurately targeted on the age, location and likes and dislikes of customers. Will happen. Watch too many Netflix travel shows? You may well find yourself seeing advertisements for Sunny Getaway. It can be so special.
Netflix needs to change something. The cost of living crisis has seen people pick about their streaming services, and the price hike in March this year may not have helped.
If ads keep Netflix from canceling so many shows and laying off employees, it would be a good decision. We just need to see how much it costs and how many ads they want us to see…