Netflix advertising subscription: First talks with advertising partners?

Netflix wants to follow up its announcement with action. The industry leader in the field of video streaming wants to launch a subscription model that is supported by advertising and is therefore associated with lower monthly costs. It has now become known that Netflix is already negotiating with search engine and online advertising giant Google, among others. Can the company behind successful productions like Stranger Things, House of Money and Better Call Saul get its head out of the noose this way?

Corporate rescue of Netflix with new subscription model?

Netflix is currently in a real slump, which the company probably could not have imagined just a few months ago. After all, the streaming service was one of the real winners due to the corona-induced global lockdown. Now, there doesn’t seem to be too much left of the former exuberance. After all, the high-flying period was followed by a really hard fall, which most recently manifested itself in miserable quarterly figures. Accordingly, the company announced measures to help it regain its old strength. These included a new subscription model designed to lure new customers with a low monthly fee. To make it profitable for Netflix, this model is to be based on video advertising.

First customer meetings with advertising partners

Now, the company is apparently putting its plan into action and is going to the ranks of well-known advertising companies to catch customers. One of them is none other than Google. Netflix shows itself however on inquiry of the Wall Street journal still very covered, which concerns the new Abomodel. In particular, they did not want to comment on the first potential partners.

We’re still in the early stages of deciding how to introduce a lower-cost, ad-supported option, and no decisions have been made.Netflix spokesperson

But the partnerships are probably not supposed to be quite so secret anymore. In addition to NBC Universal, Google is also said to be in the mix, according to information from the Wall Street Journal. While NBC Universal with its advertising experience of many years is suitable in the best way, Google brings best technical conditions along. After all, the company, which belongs to the Alphabet Group, is considered an expert in online advertising and its integration into videos with YouTube.

A new form of advertising?

Many of Netflix’s classic customers probably can’t even imagine how annoying ads can be. This may not be a factor on YouTube, where short-form content tends to be the focus on a regular basis. But what may be fine for entertainment formats and series can be real poison for the impact of a movie. If you think back to the good old TV evenings of Friday, Saturday and Sunday, you can quickly understand why commercial breaks can turn a movie into a real ordeal. After all, they run for at least five minutes every 20 minutes or so. Netflix is also aware of the problem and therefore wants to try to make commercials as tolerable as possible.

We want a fairly simple market entry – which we will in turn build on and iterate. What we do first will not be representative of what the product will ultimately be. I want our product to be better than TV.Ted Sarandos, chief executive at Netflix

Is Netflix getting into the advertising business itself?

The streaming service seems to be really serious about its ambitions. According to an article by LightReading, for example, Ted Sarandos revealed at a conference that, if necessary, Netflix itself would provide the appropriate advertising technology. The goal is and apparently remains to deliver undisturbed entertainment. Here it becomes clear once again that Netflix sees the ad-financed subscription model as the last straw to be able to climb out of the slump again. If you take a look at the development of the last few months, you can understand that. Inflation has driven many people to give up luxury goods.

These include subscriptions to streaming services, among others. In addition, Netflix could not avoid discontinuing its service in Russia. This was a political statement on the Ukraine war, but cost the company 600,000 customers. With the ad-financed subscription, the streaming provider should not only gain new customers. On top of that, the new cheapest subscription could serve as a safety net for all those who are toying with the idea of canceling the service.