Netflix is making its cheaper subscription version more attractive with advertising, thereby increasing the fight for the advertising money that previously flows into traditional television. Users with an advertising subscription will soon be able to download films and series for later – and the picture will be sharper with full HD resolution.
A year after the launch of the subscription tier, 15 million customers are accepting advertising on the service, which was previously ad-free. In total, Netflix recently had a good 247 million subscribers. As a further innovation, customers with an advertising subscription will in future be able to use the service on two devices at the same time, as Netflix announced on Wednesday. In a new advertising format, after watching three series episodes one after the other, you can watch the fourth one without ads.
According to previous information from Netflix, around 30 percent of new customers opt for the subscription with advertising in the countries where it is available. The development goes hand in hand with the crackdown on sharing accounts across households. The subscription with advertising costs 4.99 euros per month in Germany and the cheapest version without ads starts at 12.99 euros.
Pressure on television channels is growing
On the other hand, Netflix also wants to attract advertisers with more options. Among other things, in addition to the current 15 and 30 second clips, they will also be able to publish 10, 20 and 60 second spots. The advertising customers should also be able to better measure the success of their advertising campaigns – and also be able to act as sponsors of programs according to a model that has been tried and tested on TV. With the ability to place advertising in specific genres, the most popular program and individual user groups, Netflix is leveraging its data advantage.
The popularity of streaming services is increasing pressure on the business model of traditional television broadcasters. In Netflix’s home market, viewers are also increasingly canceling their expensive cable contracts with many television channels. It’s gotten to the point that Disney boss Robert Iger believes a future for the company without classic TV channels like ABC is likely. They were once a reliable source of money for the company, but now the business is shrinking – and faster than Iger admitted he had expected.
At the same time, Disney will now have to fork out at least $8.6 billion to take over the remaining stake in the video streaming service Hulu. The entertainment giant is buying the 33 percent stake from the media group NBCUniversal. Hulu streams series from broadcaster chains in the USA, and the service also shows its own productions such as “Only Murders in the Building”. In Germany, its program is embedded in the Disney streaming service.
Hulu was once owned by Disney, Fox and NBCUniversal. But Disney already owned the majority since taking over the Fox business, and NBCUniversal had the right to sell its share. A minimum value was set. Now it is still to be negotiated how much more NBCUniversal is entitled to.
