How are ads displayed on Netflix?
For years, this was a trick question since Netflix had no ads. Ad-free shows and movies have been a core part of the streaming service’s proposition and a way of differentiating it from traditional TV. And over the years, when investors and other outsiders asked Netflix to add ads to make more money, Netflix executives told them it was a bad idea. .
Netflix has changed its mind because Netflix’s fortunes have changed. As such, we plan to offer a new, cheaper, ad-supported version of the service, launching in the US on November 3rd and rolling out to 11 other countries shortly thereafter. The ads will appear just like the ones you see on TV.
The basics of the new service — no ads or other changes to existing Netflix subscribers — are straightforward, and have been mostly in the business press over the past few months when Netflix made the rounds to advertisers. been reported.
- It costs $7 per month, which is $3 less than Netflix’s bare minimum basic plan and less than half the standard $15.50 plan.
- Ads are shown for approximately 4-5 minutes per hour before and after shows and movies. It’s less ad-laden than traditional TV, but pretty standard for a streaming service. Netflix says new movies on the service will only show “pre-roll” ads that run before the movie, while older movies will show ad breaks throughout the movie.
- Netflix says a “limited number” of shows and movies will not appear on its advertising service due to unsuccessful deals with some content owners. Availability varies by country, but we estimated that 5-10% of Netflix’s catalog may not run on ad services.
- Users will not be able to download shows and movies that are available on other Netflix plans.
What Netflix is trying to do here is simple in concept but hard to execute. We hope to bring in new, price-sensitive subscribers and generate more revenue without incentivizing existing subscribers to downgrade. income will decrease.
I don’t know if it works, but I know it’s the same trick everyone else in streaming is trying. We offer versions with or without ads. And companies like Paramount and Fox are capturing viewers with free, ad-supported streaming services. Apple’s main holdout at the moment is his AppleTV+, but Apple is reportedly floating advertising products as well.
We also know that Netflix serves ads for the same reason everyone else does. Finding new subscribers is getting harder and harder to keep existing subscribers. This is also how full price subscribers are not bailed out completely. stranger things If you’re ready to turn off Netflix, the service may hang a lower-priced version to keep you signed up.
The ad launch is also meant to help solve another problem that Netflix previously claimed wasn’t a problem. It’s about people “sharing” their Netflix password and watching it for free. In the days of Netflix’s rapid growth, we more or less encouraged password sharing, but now we estimate that 100 million households worldwide watch free Netflix, and some of them Netflix is already conducting tests in several countries, encouraging password sharers to become paying subscribers with discounts, and will soon become a shareholder It is easy to see that the advertisement version is introduced to
All of this has been more or less passed down to Wall Street and would-be ad buyers over the past few months. It will be announced in the next few days. This is also the day Netflix plans a big party for advertisers in New York City. Now Netflix can see what subscribers (and those who haven’t yet) think about all this.