Are you a Netflix buff? Well, we have some news that may not be so pleasing to know. You will soon be having a different Netflix experience because of the introduction of ads. Those who choose to pay higher subscriber fees could surely watch their Netflix shows and movies as before. Unfortunately, those who want to pay a nominal monthly rate will have to make do with the ads interrupting every favorite scene. Those of you who happen to be Netflix fans wouldn’t want to change the tier. You can just pay more and continue as before.
Many subscribers aren’t happy about this news. However, a Netflix spokesperson clarified that several customers didn’t mind the ads instead of shelling out more, as Netflix is expensive of the lot. It would be an ad tier for those who chose to pay a lower price to watch Netflix shows and movies.
Consequences that led to changes
Netflix might have taken this step to gain some revenue after losing 200K subscribers in the last quarter. An investigation showed that there was sharing of Netflix accounts among households. Hundreds of Netflix employees were also laid off last Thursday due to the drop in stock price. Official news said about 300 employees in the US were given the pink slip. The number of people laid off by the streaming giant is almost two times the cut made last month. The stock price has also taken the plunge, impacting employee morale.
The spokesperson, however, reiterated the streaming platform’s commitment to invest in the business. However, due to the slower revenue generation, certain steps were needed to manage the business, and laying off employees was the need of the hour. They are strategizing by hiring contract workers and editorial staff from a hiring site to fill in the gaps until things smoothed out for the streaming platform.
Incorporation of the proposed changes
Experts believe that the January price hike might have hit the wrong note among subscribers. Since the competition has increased from several other streaming platforms vying for viewer attention, especially Amazon, Walt Disney, Hulu, etc., which have a good subscriber base growth. However, there is a growing rumor that Netflix may be acquired soon, and Netflix‘s Co-CEO Ted Sarandos hasn’t denied the possibility. Only time may tell, but for now, the operations happen to function at a feverish pace, with new shows and movies being introduced uninterrupted.
They are reworking their strategies to sustain the onslaught of such a large number of subscribers going kaput. The subscription model will be the revenue generation tool to get back the love they have received over the years.
The introduction of the ad model is a measure that will enable it to get back to earning revenue just like the Hulu streaming platform. Though this announcement has been made, there hasn’t been any information about the new price the subscribers will pay. Currently, the viewers happen to pay according to the video quality. Netflix will introduce the ad-supported tier possibly be introduced by the year-end.
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For a long time, Netflix has been in talks with several companies for advertising partnerships to capture more subscribers by lowering the price through ads. This cheaper plan will entice those subscribers who found it hard to latch to the high fee that Netflix charged for its services. However, after a decade of being introduced to the market, Netflix is seriously looking out for advertising partnerships to help grow its subscriber base.
Talks are on with Alphabet Inc’s Google and NBC universal to get on with potential collaboration for marketing. The scenario is a little different for the Netflix competitor Walt Disney, who has decided to keep the ad-supported tier on the back burner till the end of the pandemic streaming boom goes down a bit. They may unveil a similar plan to Netflix when the right time comes.
Now it depends on the subscribers, will they want to explore other streaming platforms or stick with Netflix and accept the new subscriber rates. This may not be a million-dollar question, but the future of Netflix lies in it. Accepting the ads and paying lower is another option that some may take up for not losing out on the Netflix shows and movies.
Also, there is another option if you want to become an entrepreneur and not just a user. Starting up an OTT platform as a startup business, you can opt for Netflix Clone and design your company application in the similar way. Look for clone app developers to proceed further with the development.