Although it is still the undisputed leader in the streaming content segment, Netflix is not willing to let new customers slip away. The strategy of offering cheapest ad-supported service it is an irremediable fact. And in the last hours the company offered new details of how its implementation will be.
It was his own Ted Sarandosco-executive director of the streaming platform, who anticipated that the ads are here to stay in the world of platforms on demand.
“We have left a large segment of customers off the table, which are the people who say Netflix is too expensive for me and I am not willing to continue paying. We are adding a level with ads for people who sayI want a lower price and I will look at the ads‘” the manager said.
The confirmation took place in a conference framed in the Cannes Lions International Festival of Creativity. There Sarandos pointed out that they are already talking with companies specialized in advertising. All this, in order to finish integrating a good ad system on the platform.
Ted Sarandos, co-CEO of the streaming platform, confirmed that the ads are still up. AP Photo
Within the advertising sector, there are some renowned firms with which he is talking, such as Magnite, FreeWheel, Comcast or Google itself. He did not confirm Sarandos what exact plans they have to associate with these companies, although he admitted that for now what they are looking for is support with which they can achieve “an easy entry into the market.”
Initially, the idea would be to include four minutes of advertising content for every hour of content broadcast, so that every day a user could see a maximum of a little over an hour of ads.
Everything seems to indicate that this subscription modality is imminent and would arrive on Netflix at the end of 2022, offering cheaper options to viewers.
The idea of putting ads on Netflix represents a 180-degree turn from what the company had been doing until recently. For years, its top managers and investors rejected the possibility of incorporating advertising into some of its packages, considering that it was not necessary.
Netflix: a complicated economic situation
The numbers do not match the company’s expectations. Photo REUTERS
For a year, with the arrival of new competitors, the portal has been going through a delicate economic situation, with a drain on subscribers that has led to the massive dismissal of employees in all offices.
However, the company has a gigantic market worldwide, with millions of captive subscribers and a position of power that they can use to their advantage.
According to figures published by the streaming company in April, at the end of the first quarter of the year, some 200 thousand users decided to leave the platform, which translates into millionaire losses.
The complexity of the situation is that according to Netflix projections, this trend will continue for the rest of this year 2022, being able to lose up to two million subscriberswhich represents a true indentation.
The challenge facing Netflix is that other services have already announced that they will also start offering cheaper packages that include advertising. Such is the case of Disney + which has also faced a decline in its number of subscribers.