After Disney+ and Prime Video: This is changing for Netflix subscribers

WWho watches their movies and series on Netflix, Disney+, Prime Video or Apple TV+ today can’t imagine what it’s like on TV: movies that actually run for two hours are 30 minutes longer – because commercials interrupt them many times.

Abandoning this is a recipe for the success of streaming services. But now Netflix is ​​going back in time, of all people, the pioneer of streaming and a leader in the global market. From November 3, it will also be announced on Netflix, after which users will pay €4.99 less than the previous basic monthly subscription.

In contrast, commercials that are 15 or 30 seconds long are shown before and during series and movies. According to Netflix, it plans four to five minutes to advertise per hour. Image quality is limited by HD quality, so sharpness is slightly lower than Full HD quality. Downloads for offline viewing later will also not be possible.

Previously, the basic subscription was only available in standard resolution. In the future, the image quality will also improve slightly for users who currently have a cheaper subscription.

Read also

Everyone has 2 to 5 options

The new ad-supported subscription will be available in 13 countries at launch, namely Australia, Brazil, France, Germany, Italy, Japan, Canada, Korea, Mexico, Spain, the United Kingdom and the United States.

Read also

my ad Online Jackpot

However, if you want to watch Netflix movies and series with better picture quality, on several devices at the same time and also offline, ie without an Internet connection, for example on a plane, you have to access the more expensive subscriptions for 12.99 euros or 17.99 euro. Nothing changes here for users.

For Netflix, ad-supported subscription is a small revolution. In recent years, Los Gatos in California has responded to speculation that it wants to boycott its films and series. “There are no ads on Netflix. Point,” CEO Reed Hastings wrote on Facebook in 2015.

This is where you will find third party content

To view embedded content, your revocable consent to the transfer and processing of personal data is required, since such consent is required by embedded content providers such as third-party providers [In diesem Zusammenhang können auch Nutzungsprofile (u.a. auf Basis von Cookie-IDs) gebildet und angereichert werden, auch außerhalb des EWR]. By setting the toggle switch to “On”, you agree to this (which can be revoked at any time). This also includes your consent to the transfer of certain personal data to other countries, including the United States of America, in accordance with Section 49(1)(a) of the GDPR. You can find more information about this. You can withdraw your consent at any time via the toggle and via Privacy at the bottom of the page.

Then, last April, he chose very different words when presenting the balance sheet: “Those who’ve followed Netflix know that I’m against the complexity of ads and I’m a huge fan of simply subscriptions,” he said. “But as much as I like that, I’m a huge fan of consumer choice.”

Now users can choose between expensive without ads and less expensive with ads. This is of course not without risks. Because it’s questionable whether Netflix will eventually make enough money through ads to offset the revenue loss that occurs when a large number of full subscribers suddenly switch to the cheaper tariff.

According to Netflix, the catalog of movies and series on an ad-supported subscription is about five to ten percent smaller than that of all other users. “A limited number of movies and series will not be available for licensing reasons,” the company’s blog says. “But we are working on it.”

Netflix co-CEO, Ted Sarandos, made a similar statement when the balance sheet numbers were presented recently. She said that for the ad-supported service, Netflix will have the rights to most of the content that users consume on Netflix.

There are reasons why the group is changing its strategy now. The company, spoiled by success, stumbled and lost its subscribers for two consecutive quarters, most recently with nearly a million subscribers.

Read more about streaming services

There are two main reasons for this. In many markets, consumers are starting to save because they need to keep their money together. And unlike the past few years, the competition in the live streaming market has grown.

Although Netflix is ​​the worldwide market leader with 220 million subscribers, many other services are fighting for new users in the important domestic market of the United States, including Disney+, Hulu, Paramount+ and HBO Max and Amazon Prime Video and Apple TV +.

Lots of competition in Germany too

And, by the way, this also applies to Germany, where not all these services are provided, but many of them. Here, too, it gets tighter and tighter. Paramount+ announced its market launch in Germany for the month of December. Netflix and Prime Video compete head-to-head in Germany.

Many companies now see opportunities for growth through advertising-funded offers. Some of them even waive the subscription fee entirely. In Germany, these include, for example, Freevee and Pluto TV.

Freevee is owned by Amazon and featured from streaming service IMDb TV. Other services offer a discounted subscription price for ad breaks, as Netflix is ​​now planning to do so. In the US, this applies to Hulu and HBO Max.

Disney+ takes a slightly different approach. In the US, ad clips will be shown to standard subscription users in the future. If you don’t want that, you pay an extra three dollars for the service, which then gets you the extra “Premium”. According to unconfirmed reports, Apple is also working on an advertising variant for Apple TV +.

Netflix is ​​venturing into uncharted territory with its new service. That’s why the group joins Microsoft as a technology and sales partner. Microsoft was able to prove itself against Google Alphabet Group and NBCUniversal (Comcast) in partner selection.

Admittedly, Microsoft’s advertising business is not that large by comparison. But the company acquired the necessary knowledge by purchasing advertising technology company Xandr from AT&T. Most importantly, Microsoft does not maintain a streaming service that competes with Netflix.

Netflix depends more than ever on providing a vision for its growth. The stock lost nearly 60 percent of its value within a year. Officially, Netflix does not make any ad serving targets that it supports.

But in mid-September, the Wall Street Journal (WSJ) reported an internal forecast of about 40 million users by the third quarter of next year. The group shared an interview document with media agencies.

More users than subscribers

However, in this case, users and subscribers should not be confused, because in many households several people share access. Sharing accounts outside the home has always been a thorn in Netflix’s side. But the group did not want to take any action yet. The company is now testing additional fees for sharing access in individual countries such as Peru, Costa Rica and Chile.

Advertisers, however, are interested in the number of people who see the commercials and not the number of subscribers. With an ad-supported service, Netflix needs to be more transparent about viewership than in the past. The group has been very cautious here – always on the grounds that they didn’t have to report this number specifically because they didn’t show any ads.

Read also

Netflix fights low subscriber numbers

In the future, public numbers will be reported – for the first time – by external and independent bodies. Netflix reaches out to the British TV rating agency Barb’s Audience Research Council (Barb) and US market researcher Nielsen. Then the audience will see for the first time the success and failure of Netflix productions. So far, Netflix has only highlighted the success of its most popular shows.

Apparently, the group doesn’t just have high goals when it comes to its audience numbers, according to a WSJ report, advertising prices are also said to be high. Compared to investors and media agencies in the USA, the group has set a price per thousand contacts (CPM) of $80, which would be at the higher end of the industry. This is the price advertisers pay to reach 1,000 Netflix customers.

Advertisers can choose the country and type of movie their locations are shown in. Netflix says they can also prevent their ads from appearing on content inconsistent with their brand, such as sex, nudity or depictions of violence.

You can listen to the WELT podcast here

To view embedded content, your revocable consent to the transfer and processing of personal data is required, since such consent is required by embedded content providers such as third-party providers [In diesem Zusammenhang können auch Nutzungsprofile (u.a. auf Basis von Cookie-IDs) gebildet und angereichert werden, auch außerhalb des EWR]. By setting the toggle switch to “On”, you agree to this (which can be revoked at any time). This also includes your consent to the transfer of certain personal data to other countries, including the United States of America, in accordance with Section 49(1)(a) of the GDPR. You can find more information about this. You can withdraw your consent at any time via the toggle and via Privacy at the bottom of the page.

“All in Stock” is the daily stock exchange snapshot from the WELT Business Editorial Team. Every morning from 7 am with our financial journalists. For stock market experts and beginners. Subscribe to the podcast at spotifyAnd the Apple PodcastAnd the amazon music And the Deezer. or directly via rss feed.

Leave a Comment