What you should know about Netflix economic plan with advertising and less content

what will you do now Netflix? After starting to charge in some countries for additional users, the streaming giant is now looking to inject advertising for those who want to purchase a cheaper plan. How will it work?

One of the characteristics that the platform had is that, in addition to showing its own content, one could enjoy it without having advertising guidelines, unlike conventional television.

What is the reason for the decision? Netflix presented a report on Tuesday, July 19, detailing that it has lost 970 thousand subscribers in the second quarter of 2022, the largest loss in the company’s history. And to try to win back customers, he has decided to take a new step at the hands of Microsoft. What is it really about?

WHAT WILL NETFLIX BE WITH ADVERTISING?

The Netflix package with ads will be incorporated into the plans that currently exist as a cheaper option, which would begin to apply from 2023.

“Our lower-priced ad-supported offering will complement our existing plans, which will remain ad-free”the company said in a letter. It is said that it will first be offered to a small group of markets where there is significant ad spend.

Will all Netflix content be viewable on the ad-supported plan?

Netflix co-CEO and chief content officer Ted Sarandos revealed that Netflix’s ad-based tier will not include all of its licensed content at launch, due to its current licensing terms with studios preventing it from sharing that content. on a level that includes ads. This means that the ad-supported tier will not have access to Netflix’s entire library of movies and shows.

Microsoft will handle advertising content on the platform (Photo: Bloomberg)

HOW MUCH WILL THE NEW NETFLIX PLAN WITH ADVERTISING COST?

The exact price has not yet been revealed. Netflix COO and Chief Product Officer Greg Peters believes that the cost in the subscriber of this plan will be lowlower than that of other services and attractive enough to be considered the membership to pay for many millions of future subscribers around the world.

Our global ARM has grown at a CAGR of 5% between 2013 and 2021, so it now makes sense to offer consumers a lower priced option with ads, if they so choose.”. she explained.

WILL NETFLIX OFFER CONTENT LIKE CONVENTIONAL TELEVISION?

Netflix says no. The company reported that it has already signed a contract with Microsoft as its exclusive advertising partner and wants to design a system that is not intrusive and away from traditional advertising.

“Sellers who look to Microsoft for their advertising needs will have access to Netflix’s audience and all of its quality television online inventory.”explained the president of Microsoft Web Experiences, Mikhail Parakhin, in another statement released by this technology company.

WHAT IS NETFLIX’S DECISION DUE TO?

Netflix has presented a confirmed during the presentation of its earnings report that it has lost 970 thousand subscribers in the second quarter, the largest loss of subscribers in the company’s history.

The company estimates that households that do not pay to the platform, but benefit from its services, reach 100 million, 30 million of them in the United States and Canada alone.

LEARN MORE ABOUT NETFLIX

WHAT DUE TO THE FALL OF NETFLIX?

The blow that the streaming platform has suffered is mainly due to these factors:

  • Suspension of service in Russia: constitutes the loss of 700,000 subscriptions. “Without this impact, we would have had an additional 500,000 subscriptions,” compared to last quarter, Netflix said in a statement.
  • YoExchange of identifiers and passwords: that allow many people not to pay to access the platform. Netflix figures indicate that 222 million active payment accounts on Netflix, but another 100 million households access with the credentials of another user.
  • The competition: New platforms such as Disney+, Hulu and HBO Max have appeared, which also generate their own content.

WHAT IS NETFLIX?

Netflix is ​​a subscription streaming service that allows members to watch TV shows and movies ad-free on a device with an Internet connection. In other words, those who are subscribed can choose from a large number of movies, series, documentaries, concerts and others that they want to see at any time. However, one of those characteristics, not having advertising, could change with the crisis it is going through.

Being a multiplatform service, the content it offers can be viewed through various devices, as long as they have the possibility of connecting to the internet and paying a subscription detailing this. More information.

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