Advertising coming to Netflix, here’s why
Popular streaming video platform Netflix has confirmed a cheaper subscription with ads included
It's official: a cheaper subscription is coming but with ads for Netflix.
Co-CEO of the popular video streaming platform, Ted Sarandos, confirmed that the company plans to introduce an ad-supported subscription to its streaming service in an interview with the Cannes Lions advertising festival, The Hollywood Reporter reported.
This is a confirmation of a news already known : in fact, in May the New York Times revealed that the video streaming platform would launch a low-priced subscription with advertising by the end of 2022.
The Los Gatos-based company is struggling as streaming competition is heating up: shares plummeted last month after Netflix recorded its first subscriber loss in more than a decade. Not only that, CEO Reed Hastings warned investors that he could lose 2 million subscribers in the second quarter of the year.
So the announcement did not surprise much.
As The Verge points out, the company was widely expected to launch an ad-supported subscription plan for its streaming service ever since its other co-CEO Reed Hastings said he was open to the idea in April.
Additionally, Netflix's strategy for a cheaper subscription mirrors that of rival Disney Plus, which aims to launch a similar offer later this year.
All the details.
NETFLIX CONFIRMATION REGARDS ADVERTISING
“We've left a large segment of customers off the table – people who say, 'Hey, Netflix is too expensive for me and I don't mind advertising,'” Sarandos said. “We are adding an advertising plan; we are not adding ads to Netflix as you know it today. We're adding an ad plan for people who say, "Hey, I want a lower price and I'll be watching ads."
So the strategy is clear: keep your current ad-free subscription options and offer a cheaper subscription to those willing to watch ads.
The delay in subscriber growth prompted Netflix to consider offering a lower-priced version of the service with advertising.
The Los Gatos-based company hopes to attract more subscribers and return to growth at a faster rate. Netflix reported in April that it had 221 million subscribers, making it the leader in the streaming market, but that it lost 200,000 users in the first quarter of 2022. If that wasn't enough, it noted that it expects to lose another two million in the year. second quarter.
NOW THE CHOICE OF THE PARTNER
“Now, the question is which ad sales company Netflix will partner with to help them get into the advertising industry,” The Verge points out. In early June, the Wall Street Journal reported that NBCUniversal and Google were the top two contenders. Sarandos suggested the company could use a partnership as an interim measure while building its advertising business, the WSJ notes.
NO ROKU
Finally, co-chief Sarandos dismissed recent rumors that Netflix may be looking to buy a streaming hardware company like Roku .
In early June, Business Insider reported that the Roku company informed employees it closed trading to allow its employees to sell their shares, a possible prelude to acquisition talks with Reed Hastings-led video streaming platform.
“We don't need it,” Sarandos commented.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/pubblicita-in-arrivo-su-netflix-ecco-perche/ on Tue, 28 Jun 2022 07:13:22 +0000.