When Netflix came onto the scene, it felt revolutionary. You could stream a ton of movies for a small price. Then the selection got better, shows were added, and everything seemed to be going its way. The numbers were huge.
By the time the pandemic hit, Netflix's stock soared. It felt like that while other streamers were catching up, none were making content and getting new viewers like Netflix.
Now, suddenly, it seems like things have started to unravel.
Recently, Netflix announced password sharing was killing its business, losing them around 100 million subscribers. Then, its prices went up. Then it lost over 200,000 subscribers, and another 700,000 when it canceled service in Russia.
Now, Netflix is introducing a tier with commercials, effectively neutering what differentiated it from just regular TV.
Netflix COO Greg Peters said that advertising “is an exciting opportunity” for the streamer.
“Those who have followed Netflix know that I have been against the complexity of advertising, and a big fan of the simplicity of subscription," Netflix co-CEO Reed Hastings said.
"But as much as I am a fan of that, I am a bigger fan of consumer choice. And allowing consumers who would like to have a lower price, and are advertising-tolerant, get what they want, makes a lot of sense.”
We've seen other services like Hulu introduce advertising, but it felt less obtrusive because Hulu's main content is TV shows that are built for network and have natural commercial breaks. Same with Peacock and Paramount+. Netflix's shows are branded without those interruptions. And so was their movie content.
“In terms of the profit potential, definitely the online ad market has advanced, and now you don’t have to incorporate all the information about people that you used to," Hastings said. "We can stay out of that, and really be focused on our members, creating that great experience.”
Time will tell how this all shakes out, but for now... it seems like Netflix has come full circle. We've come from breaking down what TV used to be to just becoming TV again.
Let me know your thoughts in the comments.
