Leading streaming service Netflix is inching toward a launch of advertisements-based service on the platform after months of dwindling revenue. The ads are expected to make their debut in November for Australian viewers.
Details from unnamed insiders confirm that Netflix is in talks with local advertisers ahead of the launch. According to The Sydney Morning Herald, the ads will be displayed at the start of a film or episode and will be unskippable.
The ad model will operate in tiers and will not be displayed for accounts paying the regular price. Information picked up by Bloomberg stated that the service will cost around $8 less than the average price of the basic Netflix subscription.
For advertisers, there is significant talk that Netflix will charge $95 to reach 1,000 views, but there is still a window to tweak prices ahead of the proposed launch date.
“We are still in the early days of deciding how to launch a lower priced, ad-supported option, and no decisions have been made,” said a company spokesperson.
Despite the disclaimer, local sources report that Netflix will be cautiously approaching the launch, blacklisting several classes of advertisers. Right out the bat, digital assets ads will not be featured on the platform, ads revolving around politics, gambling, and those that target children will also not be shown. There are unconfirmed reports that pharmaceuticals ads will not be featured on the streaming service.
This is not the first time digital asset ads have been banned from global platforms. Meta, formerly Facebook, banned crypto ads throughout the network in 2018, while Google adopted the same position. Both companies have since reversed their decision, giving a ray of hope to advertisers that Netflix might lift the “ban” sometime in the future.
Tough times for Netflix
Netflix’s decision to incorporate ads on its platform comes from negative financial results brought about by choppy macroeconomic conditions. Since the end of the pandemic, Netflix has recorded falling numbers of subscribers for the first time in a decade. In the second quarter, the streaming giant lost a staggering 970,000 subscribers, up from the 200,000 members who chose to abandon the platform in the previous quarter.
Additionally, Netflix has been plagued by a loss of content as creators migrate to their own platforms. To compound matters for the company, there is stiff competition in the space, all jostling for the attention of individual subscribers.
Paramount, Amazon Prime, and Disney+ are streaming services that have turned to an ad model to increase profitability in the face of dire macroeconomic factors.
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