Departments Digital Marketing

They’re back

Advertising has found its way into your beloved streaming service

Mike, Eleven and the rest of the Stranger Things gang are alone in a dark abandoned warehouse, unaware of the horror that lies in wait. The camera angle shifts to the silhouette of the new evil creature that’s terrorizing the small town of Hawkins, Indiana. It lets out a terrifying scream, and our heroes turn around to witness the horror. The screen fades to black and a handsome man with a blindingly white smile appears to sell you toothpaste.

The strangest thing coming to Netflix isn’t a love letter to 1980s America, but it is an unpopular relic of that era. Commercials and ads are coming to the popular streaming platform. Netflix has announced it will be creating a cheaper tier that will be supplemented with the periodic showing of commercials. The streaming giant started its new ad-supported streaming tier in November.

It’s worth noting that not everyone will be accosted by annoying ads, however. If consumers are currently subscribed to Netflix’s Standard Plan which is currently priced at $16.49 monthly, they can expect their current service with no additional ads.

Netflix stock saw a 60 per cent decrease in value during 2022, after a pretty steady rise since the COVID-19 pandemic. While adding commercials to the platform may seem like a direct response to the stock decline to appease investors, this has most likely been in the works for the last few years. Still, Netflix remains on top of the streaming services market share, followed closely by Disney+.

What does this mean for consumers? Not a whole lot. The vast majority of users won’t be affected with their current package. It’s yet to be seen if this change will encourage current subscribers to downgrade their service, or if it will attract new users to the streaming service.

How this affects advertisers is a little more nuanced. Even for a beginner, digital ads are inexpensive and fairly simple to get set up and running on YouTube and social media platforms such as Facebook, Instagram and TikTok. Operating on user generated content means that both it and the advertising are served through an algorithm. As formulaic as some Netflix shows seem to be, they’re still created and curated by people, and the advertising will most likely follow a similar process.

Television commercials are an expensive and arduous process compared to digital advertising. They normally require passing through several people, higher quality production value, and a commitment with a sizable budget. This means that the commercials shown are more than likely going to be curated ads from worldwide brands, similar to what you’d see on cable.

Discourse online and on social media may lead one to believe that this marks the downfall of the streaming giant, with dozens of people pledging a boycott or personal pledge to cancel their service.

Is this the start of the end for Netflix? Will the oldest streaming platform weather the storms of change? 

You’ll have to tune in next season to find out.


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