Friday, December 8

We believed that streaming would save us from commercials. Now the future of streaming is, precisely, advertising

Movies and series without interruptions at the most inappropriate time. Without oversized flies that remind you that the next day, at the same time and on the same channel you will be able to see a reality show of celebrities that you are not interested in. Movies and series, in short, closer to the format under which they were conceived. Or what the hell: where you mark the breaks to go to the bathroom or to prepare dinner to your liking. All of this, in theory, was the streaminga luxury in which we decided how to watch television and whose only precedent, obviously more expensive and limited, was owning movies and series in physical format.

That theoretically idyllic situation has begun to change: Netflix’s spectacular stock market crash, after the announcement in its latest quarterly results report that it has lost 200,000 subscribers in 2022, has forced the platform to take action. One of them is to limit, with different proposals that are already being planned, the contentious issue of shared accounts. Another, confirm that you are studying the possibility that some content carry ads. However, it is not the first time that this tricky issue is on the table.

What would a Netflix with ads look like? It is not yet very clear what plan the platform is studying. Its CEO Reed Hastings states that “those who have followed Netflix know that I am against the complexity of the ads and that I am a big fan of the simplicity of the subscription. But, as much a fan of that, I am a fan even more of giving consumer choice. Offering what they want to consumers who would like a lower price and who are ad tolerant makes a lot of sense. So it’s something we’re looking at now and we’ll try to figure it out in the next year or two years”

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Netflix, you have a problem and it's not the shared accounts or (only) the price: it's the content

“Offering even lower prices with ads as an option to consumers” is a very broad bet that can be reflected in interruptions of the series or movies with ads specially designed for the viewer according to what the algorithm dictates. The direction that Netflix takes is vital because it will possibly dictate a path that the rest of the platforms will follow. streaming. Although some have already taken the first steps.

The future is in advertising. Some platforms have already openly declared that they will include advertising in their broadcasts. One of the most frontally opened to the model has been Disney +. Last March, it announced that a cheaper subscription with ads would begin to be tested in the United States in 2022, which would reach the rest of the world in 2023. Rita Ferro, President of Advertising at Disney Media and Entertainment Distribution, declared about this novelty that “since its launch, advertisers have been clamoring for the opportunity to be a part of Disney+.”

Disney knows what it’s doing: Hulu and ESPN+, channels owned by Disney (and whose content we occasionally see in Spain on Disney+), have already messed around with the possibilities of advertising. In the US, Hulu has already launched a cheaper ad-supported subscription and ESPN+ does live broadcasts that include paid elements.

Even more haste was HBO Max, whose formula with ads has been in operation since last year: from 15 dollars per month the rate is reduced to 10 dollars per month for those viewers who consume with ads and without the possibility of 4K UHD (and during 2021, without the big ‘Dune’-type releases that arrived at theaters and on the platform at the same time). The average is 4 minutes of ads per hour, and at the moment it has not been confirmed that the formula will come out of the United States, although the trend undoubtedly points in that direction. Platforms like Paramount+ and Peacock also have ad-supported pricing, and we’ll see which direction it heads in when they arrive here bundled into SkyShowtime.

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The giants of technology, in the spotlight. Not only platforms streaming are testing formulas with advertising, but it is something that is being extended to all kinds of payment services. For example, Amazon has gone so far as to relaunch IMDB TV as Freevee, which is just that: free and ad-supported. Currently available in the United States and the United Kingdom, it will be arriving in other markets in the coming months, and includes series such as ‘Bosch: Legacy’, the reality show ‘Hollywood Houselift with Jeff Lewis’ and the comedies ‘Sprung and ‘High School.’

Of course, they are not top-of-the-line productions, but it should not be forgotten that Amazon owns MGM and a catalog of classics that it can release in very different ways, as well as Prime Video series that have already covered their run. on the payment platform. YouTube is also going to start a similar free content strategy: for now only in the United States, but it will broadcast full seasons of series like ‘Andromeda’, ‘Kitchen in Hell’ or ‘Heartland’

Netflix will end account sharing globally: everything we know about how this control will work

The curious factor of linear television. Although in Spain it is a phenomenon that is still stretching itself and does not grab as many headlines as the streaming by subscription, many companies are investing in the subject and giving it more and more prominence in their future plans. Tubi, for example, will give an expected profit of $300 million to Fox in 2022.

The other big name in linear television with advertising is Pluto TV, from ViacomCBS, which landed in Spain a year and a half ago. And there’s more, even if they don’t reach us here: Xumo has been active for 11 years now and is a free channel of Viant Technology and Panasonic, and produces all kinds of material on no less than 190 channels. It is clear that there is business in certain audiovisual areas that are not constrained by the periodic rate.

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