The question is almost as old as Netflix: How long can we have the world’s favorite ad-free video streaming service?
For years, when Netflix executives were asked if the company could one day run ads like conventional television, their answer was some version no. However, people who are closely following Netflix have discovered a subtle but significant change in the response last month by the company’s top CFO, who said: “Never say never”.
CEO Spencer Neumann said the company has no plans for ads, but his comments have renewed arguments from entertainment and finance people about whether Netflix will add ads.
In addition to apps like YouTube and Facebook, Netflix is the undisputed leader in how world leisure habits are changing. But streaming is hard work, period, and the ability to add commercials shows that even industry stars have a hard time repeating their past success.
Netflix is a bit of an internet freak making money solely from the monthly fees paid by its users. Conventional cable television, some video streaming services, and other companies, including The New York Times, combine subscription and advertising.
I want to consider two questions: First, does it help us when companies that make money from selling products add more paid commercial messages to the mix, as do Amazon, Apple and Uber? And second, as the technological services we love mature from new children to leaders in their field, will the pressures of adult life force them to change in ways we don’t like?
Let me step back and give some context as to why the long-standing question of whether Netflix would add ads again arises.
Netflix has been finding new customers for a long time as it has pursued its mission to become a TV for the world. But for now, subscriber growth is slowing. Netflix wants to get bigger, as do its investors, who are worried enough to wipe $ 140 billion from the company’s market value as of November. Netflix said its slower growth could be caused by more pressure from challengers, including those in the entertainment establishment such as Disney and HBO who are copying Netflix with their own streaming services.
When companies have trouble increasing sales as quickly as they hope, they usually look for new ways to make money – and this is often found in advertising. Amazon started as just an online mall, but now collects billions of dollars a year from companies that pay for it to make sure you see their dog beds or pulse oximeters.
Netflix with ads could keep the price lower for subscribers. Or it could just increase the company’s profits. I’m not sure we get lower prices when manufacturers pay to make sure we see their products on Amazon or Instacart or on Walmart shelves.
I’m curious to see what Netflix does, both because I love streaming without ads and because this is an intriguing role swap.
In the digital age, we usually see young whips challenging industry leaders. Other than this time, old guard entertainment companies like Disney are taking over the tech company. This does not happen often!
This time, it is the technology company that is big, profitable and warns its staff to be more frugal. Grandparents from entertainment, plus Amazon and Apple, are the ones throwing money around to try to quickly attract new customers, sometimes at lower subscription prices.
And just as media giants copied Netflix, now Netflix is stealing a little from them. Netflix has been avoiding TV ratings for years, but now it has them. Like old school TV, some Netflix series are releasing new episodes slowly, not all of a sudden because of the parties the streaming service has become famous for.
HBO Max, Disney + and Hulu, as well as some other streaming services of conventional entertainment companies, have two levels, one with ads that cost less, and the other without advertising breaks and higher monthly fees. That could lead Netflix to do something similar.
It’s not clear how technology companies like Netflix and Facebook could change their products and attitude towards us when they’re already close to the top of the mountain and it’s hard to keep climbing. This is still news to companies and their customers, and we don’t know how technology companies will behave when Davids challenges them to Goliath.
Before we go…
Internet monitoring, same but different: My colleagues Brian X. Chen and Dai Wakabayashi explain the changes that Apple and Google have imposed in online data collection and the ways in which a different type of internet tracking can strengthen the power of some technology titans.
Why are Russian hackers falsifying claims that Ukraine has surrendered? It is difficult to deceive anyone, but my colleague Kate Conger says that hackers supported by Russia may be trying to undermine trust in the Ukrainian media and institutions.
Connected, great visuals parallel digital worlds from the Norwegian broadcasting company PRC: The cities of Kharkov, Ukraine, and Belgorod, Russia, are not geographically distant from each other. But on TikTok, the war is constantly present on the Ukrainian side of the border, while users on the Russian side see mostly nonsense.
New technological additions are coming to baseball. I predict that fans will be angry at the messaging devices on the body and the headphones for some players to communicate on the field.
A hug for this
Pure stupid fun in this topic people on Twitter share their controversial opinions on foodincluding that bananas on pizza have a fantastic taste (?!?!).
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