Sunday, December 10

Would you pay less to watch Netflix with advertising?

Netflix changes its strategy in just a few weeks after the drop in subscribers: from saying that advertising was not the way to ensure that it will incorporate it in one or two years

Jorge Gallardo-Camacho

JORGE GALLARDO-CAMACHO Director of the Degree in Audiovisual Communication and New Media, Camilo José Cela University

Netflix has lost 200,000 subscribers for the first time in a decade and the user drain is expected to reach one million in the coming months. The pandemic bubble prompted us to consume traditional television and video platforms like never before. But the market is adjusting to a scenario with high competition and changing habits. In Spain, according to Barlovento Comunicación, each household has access, on average, to 2.7 payment platforms, with Netflix leading the way with the largest share of consumption (33.8%).

Netflix changes strategy in just a few weeks

Disney + will launch a cheaper subscription in exchange for offering advertising to viewers. Following Disney’s announcement, Netflix’s chief financial officer flatly denied the possibility of following in his footsteps. But, after knowing the drop in subscribers, the CEO of the American company now assures that in one or two years ads will be included in some of its rate plans. However, there are already 100% free platforms, such as Pluto TV, which not only offers live TV but also on-demand content in exchange for advertising.

But are viewers willing to watch ads? According to a study by IAB Spain, more than 61% of video viewers on the internet are in favor of the inclusion of advertisements in exchange for viewing content for free. Obviously, there will always be a love-hate relationship between advertising and the viewer: in fact, commercials have also marked the imaginary of a society that, until the 1990s, depended on traditional television.

One of the added values ​​of paid video platforms is, or was, that content can be viewed without interruptions. But let’s not forget that advertising is content that can interest the viewer-consumer if it is minimally invasive and offers a product that fits their profile. The potential of digital video in that sense is unimaginable.

On the other hand, Netflix could also increase its income if it eliminates the shared accounts, but that would be like indirectly raising the fees and could lead to more permanent decreases.

Who will measure the advertising impact of the platforms?

Disney assures that it has a long list of advertisers interested in its proposal. But if paid video platforms are betting on inserting ads, advertisers will want reliable data on impact. And here the melon of audience measurement opens. Will advertisers have to rely on internal, unaudited data from each platform? Will it be necessary for a company to appear that measures the success of the content to determine which one has to pay more to introduce advertising?

In the United States, Nielsen measures the traditional audience and takes advantage of these audiometers to also measure Netflix, but this system does not have the recognition of the platform. The Spanish audience consultants Barlovento Comunicación and GECA disseminate reports on the consumption of video platforms, but based on interviews.

In short, there is still no consensus measurement by the sector. The real data remains in the hands of the platforms, is private and is not made public. An exciting and changing medium-term future awaits us.

This article has been published in ‘The Conversation‘.

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