Streaming services have been ” studying ” various ways to monetize their service in order to reach more and more subscribers. In this context, ad insertion can clearly be helpful. A strategy that is in fact used in all sectors to try to adopt an “alternative” business model, but among the many platforms it seems that Netflix is reluctant to have an advertising rate, something that for its analysts is not advisable at all . Are they going to change then?
Will Netflix have advertising? This is what your advisors recommend
If we analyze other online streaming services such as Hulu, Paramount + and Peacock , which are not yet available in Europe, we realize that they are focusing on advertising subscriptions in the United States in order to have the possibility of offering their content. for a much cheaper rate. For example, we have the case of Paramount + is offered in the United States at $ 4.99 per month with “some advertising breaks” , while the ad-free plan costs $ 9.99 per month . Ultimately, advertising is used in this context to earn “alternative” and allow the end user to pay less (having to see some ads).
And Netflix? So far it seems that it has always resisted following that business model, but as reported by the PhoneArena and NextTV portals, MoffettNathanson analyst Michael Nathanson recently advised Netflix to take this kind of approach . It seems that the company of Reed Hastings and associates would have consulted this analyst and others, since although it is reluctant to launch a subscription with attached advertising (the issue of privacy is also at stake), it is also listening to the voices of experts who they assure that their position could represent “a strategic error”.
In fact, a new “fierce” competitor is gaining more and more space: Disney + . Netflix currently remains firmly at the top of the market with more than 207 million subscribers worldwide, but Disney’s streaming service surpassed 100 million subscribers in just 16 months. In this context, Reed Hastings’ company might consider seeking ‘alternative methods’ to consolidate its position in the market.
That is why analysts are advising Netflix to launch a subscription with advertising, obviously next to the classic plans , due to the figures recorded by AVOD (Advertising Based Video on Demand), given that advertising revenues have exceeded one billion of dollars in 2017 to 5 billion dollars in 2020. In addition, according to analysts, it could reach 21 billion dollars in 2025.
Will Netflix accept the analysts’ “suggestion”? We will see: at the moment there is nothing certain yet, although with the threat of many other services, not only Disney +, it seems that some solution will have to be found before we have to “suffer” another price increase for the service.
