Netflix’s ad-supported plan It already reaches 250 million people a monthtwice as much as a year ago. What started as a defensive bet to retain subscribers who were unsubscribing has become the model that defines where the market is going. streaming.
Why is it important. The psychological barrier against advertisements has not been broken by any image campaign or by any rebranding. He has broken it the price.
- The plan with advertising costs 8.99 euros per month.
- The standard without ads, 14.99.
- This difference of six euros per month, or its equivalent in different regions, is what has convinced 250 million people to accept advertising interruptions in the service for which they previously paid precisely to not have them.
Netflix has not changed its users’ attitude toward ads. He just put a number in front of it.
The context. Netflix launched this plan in November 2022 as a kind of concession. The company had lost subscribers that year for the first time in a decade and needed a cheaper option for users who were threatening to leave. The hypothesis was to retain customers on the margin.
Three years later, that second-tier plan has become the company’s growth engine.
Between the lines. The real movement is not the 250 million users. They are the ads that those users are going to see.
- Netflix has announced that it is testing a personalization tool that adjusts ads based on each account’s viewing habits.
- Anyone who watches a lot of crime series will see different ads than someone who binge-watches romantic comedies.
- When that system matures, Netflix will not sell generic advertising space but rather qualified attention to segmented audiences with a level of precision that classic TV cannot offer.
Advertisers are much more interested in reaching a million people who are likely to buy their product than ten million who don’t care.
New phase. Netflix plans to extend the ads to his feed vertical video for mobilethe one that has just been released, and also to the podcasts that it added to the platform last year.
The company is also expanding the advertising plan to 15 new countries, including the Netherlands, Poland, Sweden, Switzerland and Indonesia. Netflix’s advertising business is no longer an experiment but a line of income with its own ambition.
Yes, but. A few days ago, a US prosecutor presented a lawsuit against Netflix alleging that it has misled subscribers about what data it collects to serve advertising.
If it prospers, or if other states follow the same path, Netflix could suffer restrictions that directly affect the tool that allows it to sell that personalized advertising. The new Netflix’s most valuable asset is the behavioral data of 250 million viewers. And that asset now has a lawsuit over it.
Featured image | Xataka
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