Netflix is struggling. Fewer customers for the first time since the company was founded, and there were always problems with expensively produced or purchased content that didn’t go down well with the public and was scrapped. Advertising is supposed to get the problems under control, but an expert sees this as just the beginning. Customers have to adjust to higher prices.
Netflix: Cheap subscription could start earlier
Netflix is already a quarter of a century old – oh ha. In the 25 years since it was founded, the former DVD rental company has become the number 1 streaming service. But now Netflix is no longer unrivalled and that’s a problem for the company.
Many steps should lead out of the crisis: A stricter selection for self-produced content, for example, or the end of account sharing. The most important step is probably advertising. Netflix actually wanted to introduce it from 2023, in its own new subscription level. Suddenly it should now be much faster as early as November.
Customers then benefit from the lower monthly price. According to Bloomberg should be between 7 and 9 US dollars in the USA. US customers currently pay between $9.99 and $19.99, depending on the subscription level.
At the current exchange rate, this would also correspond to German prices because of the fall in value of the euro. However, the prices in Germany are already between 7.99 and 17.99 euros per month. In order to be attractive, a lower price for the advertising subscription would have to be set.
However, analyst Jon Fortt sees problems with advertising on Netflix: In the medium term, it should be worthwhile to generate additional income in this way. Yet in the short term, Netflix has to pay more because the streaming service does not have the right to display advertising for many third-party content. Fortt expects that the right holders will have to pay a lot for the corresponding licenses (source: Tagesschau).
Advertising on Netflix is rampant
Netflix needs to recoup those costs, as well as the revenue lost from account sharing. Fortt paints a bleak picture for Netflix customers: “Advertising will not only be in the cheapest tariffs. It will be included in most tariffs, and finally Subscribers will have to pay more than they do now to completely eliminate ads”so his prognosis.
How high the prices could then rise is still completely open. A current analysis has shown that for German customers, the limit is 30 euros per month – but for all streaming editions, not just for Netflix.