We know that Netflix is going through a terrible phase. There has been a humongous 71% drop in the share prices and there is a prediction that says that 2 million subscribers will cancel their Netflix subscriptions. Mind you that about 200K subscribers have already left Netflix’s hand.
In the middle of such chaos, Netflix is going against its own USP. For so many years, Netflix boasted of an ad-free clean experience in their app. On the other hand, we see the curious case of Disney+Hotstar which reached insane heights of success with ad-supported tiers. So much so that even Disney+ is said to be following the idea of ad-supported tiers.
But imagine why Netflix was different? Because after a while, you can only imagine the ad-free UI of the streaming giant in budget.
Netflix plans to sell a cheaper, ad-supported alternative to its potential subscribers by the last quarter of the year. People who already subscribe won’t see the ads but the new customers will.
Microsoft will become the exclusive server and ad-seller on Netflix.
But think about that, Prime Video doesn’t shove you with ads because Amazon’s main source of income is the E-commerce website and AWS.
For Disney, it is the theatrical releases and theme parks, also for HBO it is TV. Most streaming platforms have some larger and alternative sources of income but only Netflix is the odd one out.
Netflix’s sole source of income is the subscription fee which isn’t much for supporting high-budget originals.
Thus what would be the wise decision? Going for ads or creating a better and larger alternate source of income?
Netflix should have thought and worked upon the second option before going with the first one.
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