Old people are chasing Netflix

This is a question that is almost as old as Netflix: How long can we have the world’s favorite ad-free video streaming service?

For years, when Netflix executives were asked if the company could one day run ads like conventional television, the answer was no. However, people who are closely following Netflix found a subtle but significant change in the response last month by the company’s chief financial officer, who said, “Never say never.”

CEO Spencer Neumann said the company had no plans for advertising, but his comments renewed the arguments of the entertainment and financial people about whether Netflix will add or need to add ads.

Along with apps like YouTube and Facebook, Netflix is ​​the undisputed leader as leisure habits change around the world. But streaming is a difficult business, a period, and the ability to add ads shows that even the industry star is finding it difficult to replicate his previous success.

Netflix is ​​a bit of a weird internet monetizer just from the monthly fees paid by its customers. Conventional cable TV, some video streaming services, and other companies, including The New York Times, combine subscriptions and advertising.

I want to look at two questions: First, does it help us when companies that make money from selling products add more paid commercials to the mix, as Amazon, Apple and Uber do? And second, as the technological services we love become mature from new children to leaders in their field, will the pressures of adulthood force them to change in ways we don’t like?

Let me step back and give some context on why the long-standing question of whether Netflix would add ads is re-emerging.

Netflix continued to find new customers for a long time as it pursued its mission of becoming television for the world. But for now, subscriber growth is slowing. Netflix wants to get bigger, as do its investors, who are worried enough to wipe out $ 140 billion of the company’s market value since November. Netflix said its slower growth could be caused by more pressure from contenders, including those at entertainment venues such as Disney and HBO, who are copying Netflix with their own streaming services.

When companies have trouble increasing sales as quickly as they hope, they usually look for new ways to make money – and this is often seen in advertising. Amazon only started as an online mall, but now collects billions of dollars a year from companies that pay it to make sure you see their dog beds or pulse oximeters.

Netflix with ads can keep the price lower for subscribers. Or he can just bribe the company’s profits. I’m not sure we get lower prices when manufacturers pay to make sure we see their products prominently on Amazon or Instacart or on Walmart shelves.

I’m curious to see what Netflix does, both because I like streaming without ads and because it’s an intriguing role change.

We usually see young bullies challenging industry leaders in the digital age. In addition, this time entertainment companies from the Old Guard, such as Disney, are taking over a technology company. This does not happen very often!

This time, the technology company is the one that is big, profitable and warns its employees to be more frugal. Entertaining grandparents, plus Amazon and Apple, are the ones throwing money at trying to grab new customers quickly, sometimes with reduced subscription prices.

And just as media giants copied Netflix, now Netflix is ​​stealing a few. Netflix has been avoiding TV ratings for years, but now it has. Like old-school television, some Netflix series are releasing new episodes slowly, not all at once for the celebrations that made the streaming service famous.

HBO Max, Disney + and Hulu, as well as some other streaming services from conventional entertainment companies, have two levels, one with ads that cost less and another without ad breaks and a higher monthly fee. This may tempt Netflix to do something similar.

It is not clear how technology companies like Netflix and Facebook can change their products and their relationship with us when they are already close to the top of the mountain and it is difficult to continue to climb. This is still new to companies and their consumers, and we don’t know how technology companies will act when it comes to Goliaths caused by Davids.


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