Faced with the exodus of subscribers, the SVOD giant Netflix is considering another economic model based on advertising… but “not like on TV”. At the same time, the firm is laying off a large number of employees following its collapse.
You hadn’t dreamed of it, but Netflix is going to do it: the introduction of ads in the SVOD service will be a reality in the coming months. Discussions with large groups have been initiated.
A cheaper Netflix subscription with ads
To stem the loss of subscribers, more than 200,000, the leaders of Netflix will give in to the sirens of advertising. But not just anyhow according to Ted Sarandos, co-CEO. No, the service’s advertisements will be “better integrated” for an experience above that of TV. Which, let’s face it, isn’t difficult.
We are talking to all of these companies right now. We want a fairly easy entry into the market — which, again, we will build and iterate on. What we do at the beginning will not be representative of what the product will be in the end. I want our product to be better than TV. If it gets so big that we wish we had more control over it, then we could .
Ted Sarandos via 01Net.
In 2020 Netflix CEO Reed Hastings was against it but the situation seems to be forcing drastic change. No date, but in any case, it will be a separate subscription and cheaper to pass the pill, and meet consumer demand.
We left out an important customer segment. The one where people say “Netflix is too expensive for me and I don’t mind advertising”. We add an option with ads, but we do not add ads to Netflix as you know it today.
The most accessible subscription still costs €8.99, a higher price than the competition, and does not include Full HD 1080p resolution.
The other tracks to go up the slope
For pubs, Netflix negotiates with NBCUniversal, a subsidiary of Comcast, the Roku company and the Google juggernaut. And this is not the only track. The company in red N has laid off 300 employees who are added to the previous 150, ie 450 fewer employees. A consequence of the leak of subscribers which made Netflix lose 70% of its value, with a share at $180.08 in June against $600 in January. It hurts.
The company wants revise its costs downwards to better match its revenues, less higher than expected. Netflix wants to produce fewer films and no longer open their bank accounts to renowned directors such as Guillermo Del Toro (Pinocchio), Martin Scorsese (The Irishman) and others. To see what will happen with David Fincher who has a contract until 2024, but with a budget of 25 million dollars for his feature film Mank for example, he may be in the nails and in the small Netflix papers.
Another idea: retain subscribers as much as possible by copying the competition. Instead of airing a block series season, there could be one episode per week. As for Amazon Prime, Disney+ or HBO Max.