The issue of ads and commercials on Netflix was a topic that ran through as an opportunity and was not talked about too openly, but now everything has been confirmed and subscribers will surely change their user experience.
What may be a good side of introducing ads to subscriptions is the potential price correction talked about by Netflix associate CEO Ted Sarandos. According to his announcements, Netflix will introduce more favorable subscription plans with the introduction of ads. In other words, those users who want to have cheaper monthly subscriptions will have to get used to the commercials before and during watching their favorite movie or series. Those subscribers who want to maintain the same ad-free user experience as it is now on Netflix are likely to have to set aside a higher amount for their subscription package.
The only question currently remains with which advertising companies Netflix will enter into an agreement. In early June, the Wall Street Journal reported that NBCUniversal and Google were the main competitors for the negotiations, and some media outlets confirmed that intensive meetings between Netflix and the two sides were taking place, but the final outcome was still unknown.
It can be said that the inclusion of ads and advertisements in subscriptions is a move with which Netflix primarily wants to gain additional funding at a time when the company is experiencing a sharp decline in revenue due to a drastic reduction in the number of subscribers in recent months. Entering ads and commercials is also a reflection of the subscription models used by Disney + streaming service, which is a big competitor to Netflix.
220 million subscribers worldwide is a number that will be very attractive to advertisers, but it also brings a huge amount of user data that will enhance targeted advertising of products and services.
Whether this is the right Netflix move remains to be seen. At the moment, a lot is happening with the most famous streaming service in the world and it has to balance between a larger loss of subscribers, falling stock values, attempts to impose restrictions on sharing user data and the intention to increase subscription prices.
The introduction of advertisements and advertisements does not seem radical at the moment because the possibilities of cheaper prices of those subscriptions that will contain them are mentioned, but it is necessary to wait for their concrete implementation by the end of the year in order to see results.
By: Ervin Mičetić