Netflix co-CEO Ted Sarandos has confirmed what has been a secret for some time; the ads come on Netflix.
According to the Hollywood Reporter, Sarandos confirmed reports that had leaked in the second week of May, and revealed that it was on the road cheaper, supported by the advertising level of Netflix.
Things developed quickly for Netflix in this regard in 2022. As early as March, Spencer Neumann, the company’s chief financial officer, was asked about the prospect of a level supported by advertising, and will go so far as to say that “you can never to say never ”when asked about the idea before quickly adding that it is not something in [the brand’s] plans at the moment. “
Then, on April 20, during a win-win conversation, Sarandos’ partner in crime, other Netflix co-CEO Reed Hastings, revealed that streaming was then “quite open” to the possibility of ad-supported levels, and may “predict it will come out in the next year or two.”
But now there are commercials, with Sarandos saying on stage at Cannes Lions, a five-day industrial festival that is currently underway, that he wants to win a “large customer segment.” He also confirmed that the level will be a separate offer and ads will not start appearing on Netflix accounts of existing subscribers.
Asked about the ads on the platform, Sarandos said: “We’ve left a large customer segment off the table, and these are people who say, ‘Hey, Netflix is too expensive for me and I don’t mind advertising.’ We add an ad level, we don’t add ads to Netflix as you know it today. We’re adding an ad level for people who say, “Hey, I want a lower price and I’ll watch ads.”
He did not offer any details on when the ads will appear on Netflix, but if previous reports are accurate, it will be before the end of 2022.
Sarandos was also optimistic about the company’s prospects, adding that Netflix has “… a lot of scale, profitability and free cash flow to continue to grow this business.”
The move comes as Netflix seeks to win back subscribers who have been costly by a number of increases in monthly subscription costs, and to attract people who have not yet tried Netflix.
It is also looking to increase revenue after it was announced in late April that it had lost 200,000 subscribers since the beginning of 2022, and as a result, its value has fallen by more than $ 70 billion.
Ad-supported at a lower price level is not a revolutionary idea for a subscription service. Hulu, HBO Max, Paramount Plus and Peacock are already doing it and Disney Plus will introduce the option this year as well.
Analysis: New level, the right move?
This was the only way for Netflix to run ads on its platform without causing a wave of anger among its existing subscribers. The idea that subscribers who receive the main offer of the streaming service will accept the prospect of suddenly appearing in the middle of an episode of Stranger Things is misleading.
Sarandos only confirmed the fact that there will be ads, he did not say how much the subscription level maintained by ads will cost, how often the ads will appear and how long the ad breaks will last, in all likelihood because the executives on Netflix and I haven’t decided that.
There have been reports of Netflix meeting with people like Google, Roku and parent company Universal Comcast last week as they try to outline our plans to include ads in the service.
At first glance, Netflix would be extremely attractive to advertisers, with over 220 million subscribers worldwide and a huge amount of customer data that allows ads to be targeted to the exact age, location and likes and dislikes of customers. Do you watch many Netflix travel shows? You may find that you see ads for solar escapes. It can be so specific.
Netflix needs something to change. The cost of living crisis has made people more selective about their streaming services, and rising prices in March this year will not help.
If ads stop Netflix from canceling so many shows and cutting staff, then that would be a good solution. We just have to see how much it costs and how many ads they want to watch …
Add Comment