Ted Sarandosco-CEO di Netflixconfirmed that a economic subscription supported by the advertising. Let’s find out all the details together.
Ad-supported budget subscription: Netflix confirms the news
Things moved fast for Netflix on the front advertising. At the beginning of March the financial director of society, Spencer Neumannhad been asked about the prospect of a ad-supported level. At the time, Neumann had limited himself to saying that “it is not something that is part of the plans of the brand right now”.
Then, on April 20, during an earnings phone call, Sarandos’ partner, Reed Hastingsrevealed that the streaming service was “quite open” to the possibility of a ad supported level. Hastings also said the service could “find a solution in the next year or two.”
Now, however, the advertising is really on the way. Sarandos declared on stage at Cannes Lions that he wanted to conquer “a large segment of customers”. He also confirmed that the level will be a separate offer and that the advertisements will not start appearing on Netflix accounts of existing subscribers.
When asked about advertising on the platform, Sarandos replied:
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 care about advertising.’ We are adding an advertising layer, we are not adding advertising to Netflix as you know it today. We’re adding an advertising layer for those who say ‘Hey, I want a lower price and I’ll watch the ad’.
At the moment but Sarandos did not provide any details on when the ads will arrive on Netflix. However, if the previous news is accurate, it could come before the end of 2022. During the Festival, Sarandos also said he was optimistic about company prospectsadding that Netflix has “… an abundance of scale, profitability and free cash-flow to continue growing this business.”
A smart move?
The move comes as Netflix tries to win back subscribers that have been pushed aside by one series of increases in the monthly cost of subscriptions. Furthermore, the streaming giant hopes to attract people who haven’t tried Netflix yet.
The company is also looking to support revenue after he revealed in late April that he had lost 200,000 subscribers since the beginning of 2022 and, as a result, it has seen its value drop by over 70 billion dollars.
A lower price level supported by advertising it is not a revolutionary idea for a subscription service. Hulu, HBO Max, Paramount Plus and Peacock already do and this year Disney + will also introduce this option. This idea, though, could save Netflix’s streaming service and help it regain the trust of its customers.