Netflix remains the most popular video streaming service in the world, but it is not immune to market dynamics and consumer desires. The company has posted a decline in its first customer in this decade to operate, and even lost as many as 970,000 in the second quarter of 2022 (through CNN). This streaming giant is convinced that he already has a successful strategy at work to improve that: He has confirmed plans to make a level of advertising that will have a more affordable monthly fee, something that has long been standing training in many subscription -based services.
Which says, just because you see advertisements and still paying subscription does not mean you will have access to all that Netflix offers, as revealed by this new report. Streaming services supported by advertising are not new, and, to some extent, Netflix is an outlier here. Many video and music streaming services offer free levels and try to compensate through advertisements. However, in the Netflix case, the level of advertising is not free at all but brings a much lower monthly subscription fee.
Netflix seems to have enough intention to realize this and want to launch this level before the year ends. However, far from ready, and the company admitted that it was still in the initial stage. It seems to involve walking through a legal labyrinth of content and talking with a studio about whether their content can be displayed at the level of this ad.
Netflix negotiations pave the way for a cheaper plan
The Wall Street Journal reports that the streaming giant is re -negotiating with large studios like Warner Bros., Universal, and Sony to place their content in this future subscription plan. Negotiations like that are normal in the entertainment industry, and Netflix must do the same thing when they want to let customers download the event.
The feature does not come at no cost, of course, and Netflix must add 10% to 15% above the original agreement. The studio may demand an additional 15% to 30% premium to allow their performances to flow with advertisements, premiums that will definitely affect how Netflix will give prices at this level. There are no difficult numbers at this time, and there are still a number of gray -gray law regarding Netflix’s ability to show advertisements under the agreement in the first place, according to experts who talk to WSJ.
However, more importantly, this negotiation means that not all third -party performances on Netflix can be accessed by those who are at the advertising -supported level. Some studios may prohibit certain content from streaming with advertising because they already have an agreement with services supported by other advertisements. This, in turn, can be a big prevention for people who register for a cheaper level but (potential) is more limited, returning Netflix to Square One to the customer number problem. On the other hand, a more limited choice can also function as a tempting that will make customers increase to full plans. It is still too early to say how this will happen, and Netflix will definitely push hard to get some high profile performances at the level of advertising supported to make it more interesting.