The slowdown in its subscription growth led the board of directors of the streaming platform Netflix to allow it to sell advertising guidelines to certain advertisers in order to offer a less expensive service to its subscribers.
About, Reed Hastings, the company’s founder and co-CEO, acknowledged that because he was focused on digital competition from Facebook and Google, it was slow to open the door to advertising.
“He didn’t believe in the publicity tactic for us. I was wrong on that. Hulu showed that it could do this on a large scale and offer customers lower prices. I wish we would have changed a few years earlier, but we’ll catch up,” he said during The New York Times Dealbook conference.
The truth is that after years of offering their content without commercial guidelines, In early November, Netflix, in association with Microsoft, launched a programming service in the United States for just $6.99 per month.
“For a decade I bought into the belief that data-driven systems could generate higher CPMs (Cost Per Thousand Impressions) than anyone else. Advertisers were desperate for avenues into connected TV and the internet, but Netflix was still on the sidelines.“, recognized the CEO of the company.
In this way, Netflix will now begin to fight commercial guidelines to other platforms that at the moment lead it in terms of the cheapest streaming options, such as Hulu, HBO Max from Warner Bros. Discovery; NBCUniversal’s Peacock, and Paramount Global’s Paramount+, to name just a few.
Nevertheless, Some of the entertainment chains have a double bet in the consumer market, since through other of their subsidiaries they offer free transmission services, such as Pluto from Paramount and Tubi from Fox Corp., whose income comes solely from advertising and not from paying to subscribe to their platforms, which also represents a profitable business.
And proof of this is that, in the last quarter of the year, Tubi’s revenues increased 30%.
In the middle of the scenario, Netflix will try to increase its number of subscribers through a less expensive option for those who want to save a few dollars without giving up watching restricted productions on conventional television.
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Source: La Opinion