Netflix with ads. It seems like an oxymoron. The place we reach for to get away from ads allowing ads…? What will that mean for subscribers? And why has Netflix taken this very unpopular route? We explore here.
The history
By the end of 2020, Netflix were flying high. They were considered the saviors of lockdown. Netflix Originals Tiger King, Bo Burnham’s Inside and Squid Game all became part of lockdown legend due to their cultural impact, and subscribers were at an all time high.
All of that came crashing down in the first quarter of 2021, when Netflix had to admit that the projected 2.5 million extra followers they were expecting, actually resulted in a 200,000-subscriber loss.
The company blamed everything from Russia to the economy, and their favorite old chestnut: password sharing. With the coverage surrounding the loss, the company pleaded, please stop sharing passwords or we’ll have to do something drastic. And so, they have.
Netflix has been trying everything they can to gain some extra money – short of investing in quality programming, but whatever. This move to go against the very thing that made them stand out in the first place is just the latest in a long line of attempts that include games. These games are mobile games, not involved and beautifully crafted MMORPGs, so you can see why they were mostly met with a collective “meh” from their users.
With that not getting the income they are aiming for, Netflix have launched the nuke they have been threatening for years now: adverts on the platform.
The good
According to Netflix themselves, this is as good a middle ground as we’re going to get. If they can’t or won’t crack down on password control, ads will have to come to the platform for a lower subscription price. You say our product is too expensive for what it is? Okay, have a lower price, with ads. It’s somewhat of a good deal. If you apply your God-given superpower of switching off for 2-5 minutes between scenes, you get to pay apparently up to 50% less.
The bad
It’s suspicious that the price of this predicted change hasn’t come out, despite a lot of details about popups and mid-rolls. Industry experts have predicted that 25-50% drop in price, which means judging if it’s worth it will still have to wait. It could be a few cents off the top.
For advertisements, that is simply not good enough. Netflix built its brand on offering a viewer experience without ads, and the caveat was that you had to pay a subscription fee. If you’re adding ads, you’re adding caveat onto caveat.
Not to mention the sheer hatred people actually have for advertisements might be enough to drive people away. Streaming platforms are finally a place of peace, where marketing is kept in universe with a blatant Starbucks cup on the table.
The ugly
Here is the harsh truth that Netflix needs to hear: they aren’t worth it anymore. They are The Beatles of their genre: the first doesn’t mean you’re forever the best. People have taken what foundations they laid and improved upon it.
Putting aside their Netflix Originals catalog for a moment, their catalog is a collection of every forgotten yesteryear movie and TV show. There is an ongoing joke that you will sit down to watch Netflix only to see the sun set by the time you find something you want to watch. Other platforms like Hulu and Disney+ have created a catalog that combines the latest and the classics, while HBO is beating anything Netflix can put out as TV that leaves a legend, like Game of Thrones and Succession.
It’s very possible that this move might cause Netflix to shoot themselves in the foot. They might be underestimating just how sick people are of advertisements and just how much that will affect their decision to stay. Advertisements and amazing content might have been a combination users could get on board with, but a middling catalog with originals that veer wildly from amazing to awful will not be enough to justify putting up with adverts.
