They may be able to make more money this way. To me this is akin to explain why we should be strip mining or clear cutting more. It works from a scorched earth capitalism perspective, but doesn't leave is in a good place
Subscribers are more valuable people to market to than non-subscribers because they've already qualified themselves by proving they'll spend money for something.
Ads are by their very nature derogatory to anywhere they are placed. Ads never add value to any experience. They always take time and attention from the viewer's intended activity.
Netflix could have gotten away with ads a few years ago maybe. Not now with all the competition available. their content is relatively weak tbh now that a lot of the classics have moved to other platforms. I'd be gone immediately
Probably true, but somewhere between 2015 and 2020 netflix was a pretty dominant monopoly - at least in my area.
Controlled viewing comparable to directTV / OnDemand was the main selling point. Being able to binge an entire show at will. Breaking Bad hitting its peak. I think they would have gotten away with it
The advertisement part of the superbowl content takes away from being entertained. The negative impact to the consumer is being manipulated, for example, to prefer budweiser over coors because the giant horses and dalmatian puppy made you tear up. That's got nothing to do with beer.
Remove the advertisement / manipulation from the content and it's more valuable to the consumer.
Agreed. Netflix need to decide whether they want to be more like Google/Amazon (multiple diversified bets) or Spotify (one undiversified but very strong ecosystem).
This changes the brand of Netflix considerably. While many competitors do this (Hulu, YouTube), it's a terrible experience and I've seen both myself and others simply turn to Netflix to avoid the ads. I think this would break their brand and is more short-term thinking, i.e. "how do we increase value in the next quarter", rather than long-term thinking of how to keep growing as a company.
It is also non-trivial to implement in a way that supports older devices; I can't watch ad-supported prime video channels on my BluRay player, which is rather annoying.
> While many competitors do this (Hulu, YouTube), it's a terrible experience and I've seen both myself and others simply turn to Netflix to avoid the ads
In credit to YouTube and Hulu, they give you the option to go ad free, or in the case of YouTube pay nothing at all. Have cheap price and ads, or pay a little more and get the ad free experience. I happily enjoy ad-free Netflix, YouTube and Hulu.
> I think this would break their brand and is more short-term thinking, i.e. "how do we increase value in the next quarter", rather than long-term thinking of how to keep growing as a company.
If you have read the article and try to respond to the authors points more directly, he is making a pretty compelling case as to why this is not short term thinking at all - subscriber growth is effectively over for the company now in the near term, there are little new customer households left to sell a subscription to for Netflix, which is of course why we are seeing more frequent subscription price rises too. On the contrary, he is laying out a long term strategy that may still deliver growth, something subscriptions increasingly won't as subscriber growth continues to inevitably fall.
As YouTube and Hulu both prove, one can have ad-supported and ad-free subscription tiers on the same service, and I suspect is likely the path Netflix would follow if they pursue such a plan in future. While as an individual you may not like ads (thats fine!), the slow down of subscriber growth at Netflix is pretty clear and will require a response from the business, which so far has been price rises...
I did read the article thoroughly, and I think he hasn't seen the larger perspective. I'm an investor in Netflix, and have also dug deeply into many other in-depth analyses of them, and while he says its "long-term", that doesn't mean it is.
Netflix has barely tapped its global potential (partially more and more users of countries come online world-wide), and many companies have experienced what they call "demand pulled forward", i.e. extra growth in pandemic that then falls as pandemic heads towards a close. This is short term, and he has assumed that the slow in growth is the "inevitable decline" of Netflix Subscriber growth.
Also, to be clear, I think Stratechery is an incredible source and usually agree with him. I don't in this case.
I wasn't trying to respond to his points more directly, I was taking on the perspective of what is good for the companies growth.
Just because you "happily enjoy ad-free Netflix, YouTube and Hulu." Doesn't mean most do (and there are strong statistical reasons that indicate that others enjoy it more as well).
> Netflix has barely tapped its global potential (partially more and more users of countries come online world-wide)..
The problem with this argument is it is not thought through. Expanding to newer markets is not about simply enabling credit card payment from those countries.
The performance in India (not good) proved recently it is about localizing the content. Creating or buying new content for these new market costs money, and then managing those (staffing up local orgs, local production center, data center, etc.) also costs.
Netflix is in content business, unlike software it is not about making copies and distributing world wide at zero cost.
achow@ not sure why you think it's not thought through?
You're correct it is a content business, they just spent 17 billion on new content, far more than any other streaming provider (and have the subscribers to support it). Specifically in India, with Indian creators, and it worked. It's in their book "No Rules Rules".
Netflix in India serves a niche audience. The Indian creators Netflix has brought on board so far mostly produce what's best described as prestige TV. While I've enjoyed some of these shows, they barely have a market outside of the major cities.
Netflix in India is the best example of an American company attempting to grow in India and failing because they don't have any understanding of the culture. Google, Apple, and even IKEA have figured this out. I'm sure Netflix will, too. But it'll take them a bit of time.
can't companies continue to exist on the number of subscribers that they have?
can they not reduce costs -- while continuing to service that # of subscribers -- to generate better returns for their shareholders? would such actions cause shareholder/investor revolt?
why?
> the slow down of subscriber growth at Netflix is pretty clear and will require a response from the business
how far does this go? when google or amazon or netflix or whomever has an active user account for almost all human beings on the planet, what then?
why DOES a business need to respond when their subscriber growth has passed the nadir for given market(s) at given tiers when the ROI for that business at those tiers and market volume is ~20% per quarter?
are those returns not enough? if the company (Netflix) could keep existing revenues at existing customer volumes while also reducing their infrastructure/delivery costs, would that not be enough??
> how far does this go? when google or amazon or netflix or whomever has an active user account for almost all human beings on the planet, what then?
If you are not constantly growing then you will not have everyone with you, this is because new people reach adulthood. You want them in your service while still retaining the older ones.
In a steady state when all old population have your service and new ones are automatically adopting it, then you are a public utility (Ex. social security).
And when you are a public utility or essential service then you don't have to market yourself, it becomes money printing business and it is dividend company and not a stock growth one.
Cost cutting is always on the table, although it tends to be executed by the dreaded "MBA type" who doesn't understand product. Growth enables new feature development, cost cutting generally results in a worse product. Be careful what you wish for.
>In credit to YouTube and Hulu, they give you the option to go ad free...
Unless something has changed and I'm unaware, this is not entirely true for Hulu. I've been paying for that plan for years and they definitely still play ads for select shows.
Edit: I think it has something to do with it being a network show that Hulu hosts the day after it airs on cable, or something, but they're definitely still there.
why don't they just stop hiring and enjoy the free money? as long as people aren't unsubbing, they're fine, no? why do companies always have to grow, even to the detriment of the service they're trying to offer? everything becomes shit eventually and then opens the door for the next hot thing that hasn't yet been tainted
> Due to streaming rights, there are a select number of shows from our streaming library that will play with a short ad break before and after each episode for Hulu (No Ads) subscribers
> Shows and movies from HBO, SHOWTIME, Cinemax, and STARZ don’t have ad breaks, but there may be promotional content before certain videos.
If you actually read the support page you linked and understand what Hulu offers, its still an "ad free" Hulu service for 12.99. For almost all of the limited cases where ads do occur, its due to it being an optional external streaming service integration or "live" TV channel with their own app offering that Hulu are offering as an optional extra you can bundle in (for more $$). I can't criticise Hulu too hard for not controlling ads on live television or optional third party services you can integrate to their own app - these are almost all optional extra channels/streaming services and not part of Hulu's own shows or offering.
Almost every single streaming show from Hulu themselves without exceptions is ad-free on the 12.99 plan, exactly as the plan name says. In addition to understanding the support page, I use the service and the no-ad plan almost every day in my own home, it's definitely a thing and works exactly as its name (no ads!) suggests. Its probably why it's called the "no ads" plan...
> In credit to YouTube and Hulu, they give you the option to go ad free
Not entirely, though, for YouTube because paying doesn't remove the "And here's a word from our sponsor" segments that people are now using instead of ad breaks, right?
The article describes a multiple-tier model, where people like you can pay for an ad-free experience, while more price-sensitive consumers can get a cheaper subscription supported by ads.
There's a wider dilemma at play for Netflix. As the article points out, they've reached a point where their main product (paid streaming) has saturated the market. They won and there's not much more to be gained there.
Options for their next move essentially boil down to:
(a) expand into "other bets" (e.g. games)
(b) compromise on the quality of their product and brand by selling ads to gain incremental revenue
(c) give up on growth and be happy with a large, sustainable business
They are openly pursuing (a), which is the ideal outcome. Ideally they can even launch gaming or some other form of entertainment as a separate subscription, helping to diversify their revenue.
I see (b) as the backup plan. If they're not able to diversify into another revenue source, their next best bet is to compromise their existing product and extract the final bit of juice using advertising. Some number of customers will drop down from paid to free, and that number is difficult to model. Netflix could also end up shooting themselves in the foot by introducing ads, if that convinces the whole industry to do the same. In the long run that will reduce margins for all.
Finally, (c) isn't compatible with the type of capitalist society we live in. Sometimes a company has peaked and that's OK.
Beyond pursuing, right now, if you log into the Netflix app on your iPhone they have a Gamepass/Apple Arcade style set of game that you receive alongside your subscription.
Indeed, I played a round of a game made by Trivia Crack last night. It was my first time and I think it’s a new addition? Just popped up on my Home Screen yesterday.
I think people are missing the suggestion of this article. It's not suggesting that Netflix adds advertising to the existing subscriptions; it's suggesting they add a lower-priced subscription supported by ads.
>...it would create a new benefit for those willing to pay (i.e. no advertising for the highest tiers).
If they kept the existing $10/$15.50/$20 plans the same (https://help.netflix.com/en/node/24926), but they add a $5 ad-supported subscription, that's not changing anyone's experience, unless they choose to switch.
Everyone's experience changes when a company begins to consider ad revenue.
How those changes shake out is hard to predict. It's not a stretch to suggest that even little things change for everyone though. Adding ad revenue changes how a company thinks about nearly everything, whether they're aware of it or not, and ultimately the end user suffers.
For example, Netflix would likely start trying to tweak content discovery in a way that benefits advertisers. Rather than show me content that matches my historical interests, they show me content that optimizes ad revenue as well. It's unlikely they'd maintain two different "ad-free" and "ad-full" recommendation algorithms.
Motivated by pressure from advertisers, Netflix might be less inclined to produce or provide content that made advertisers uncomfortable or benefitted an advertiser's competitors.
When producing content, they now have two bosses: subscribers, and advertisers. Both have entirely different expectations. Those expectations push Netflix into making compromises, and rarely do those compromises produce outcomes that are better than if they only focused on making one side happy.
And we'll being going to piracy if we had to watch ads on top of paying a monthly fee. This would be ridiculous. There's advertising almost everywhere else. Why do we need more advertising?
Pretty sure the advertising industry won't be happy until every human on the planet is required by law to tolerate 24/7 advertising beamed directly into their brains.
Well put. Not to mention that once the platform and business support ads, it's a slippery slope. No ads on the top tier quickly becomes "We'll just show limited ads to the top tier to make up this quarter's shortfall," and so on from there.
Many Korean series on Netflix (including ones branded as Netflix Originals, though they may only show that outside of their home region) that are set in the modern day include product placement, as of course do plenty of Hollywood feature films included on Netflix.
Now, presumably, Netflix doesn't take a cut of those today. Wouldn't be a stretch to imagine using product placement to offset the cost of producing Netflix Originals in the future, though.
No! At any freaking tier. What stops them from starting to sell data from other tiers? It will become part if their business model and will eat away everything they do, including content creation. Put that cancer back in pandora's box please!
This doesn't solve the paid vs ad supported conundrum. The ads produce lesser revenue when targeting leaner wallets. It can kill the brand and not produce significant revenue like YouTube.
The trouble is advertisers aren't very interested in people who can only afford the lowest tier. Somebody who can only afford that isn't going to be in the market for a Tesla or MacBook or any other product.
The people who can afford the tier without advertising are exactly the people advertisers want to target.
And they want to not be advertised to, so the power move would be to:
1) Advertise "ad-less" platforms to them that contain subtle advertisements for expensive but effective ad-blocker systems - even augmented reality systems that can block most billboards etc.
2) Have a controlled arms race where ads get even more egregious and bypass the old ad blockers. Sell new ones etc.
3) Add really powerful, comprehensive features to ad blocker systems that absolutely beat all the ads, but they only perform well when integrated with new, up-to-date apple and tesla products.
Not necessarily; there's a depressingly large group of people who have terrible control over their finances and are poor because they're easily influenced into buying expensive items. Definitely not the main source of poverty, but a great target audience for advertisers to manipulate.
That doesn't jive with any subscription plan I've seen from any of these companies. Far more likely that they jack up the rates on the pure subscription plans and then carve out a slightly lower priced tier with ad support.
Yeah totally! This guy who writes tech/sv vc content totally knows better than a multi-billion dollar industry leader who pioneered their business model on what they should do amirite? /s
As other commenters out this seems like horribly short term thinking. The reason I subscribe to Netflix and Amazon prime and NOT to Hulu or YT is because Hulu has ads (prime has internal ads I suppose, but I’ve always been able to skip those unlike YouTube).
I understand content generation is expensive. Maybe Netflix needs to expand more on the IPs they currently own? Merchandising and such (how about a LEGO/Stranger Things crossover anyone?) Differential pricing models for other countries would make sense too. I’m sure the board has thought of all of these and none are particularly easy, but putting ads where they don’t belong would ruin their brand.
Both Hulu and YT have premium (mostly) ad-free experiences. I say mostly as the line gets a little blurry with cross promotion of other shows on the same service.
Yeah and I think this blurred line of ads vs no ads damaged their brands at the onset as now I associate them with old school cable tv, which is what I was trying to escape.
You know how there are so many nice posts that make you go "I would want to buy this person coffee/beer if I could.", I feel the exact opposite towards this person. People like this are why shitty services like Hulu exist and why cable TV charges you $200 and is 70% (at least) ads!
I will pay netflix more than any cable company because the quality of their content.
Exploitative capitalism at its finest. Shortsighted greed with no room for imagination. I can spend 15 min and come up with at least 5 ways to charge customers more without needing to sell them ads. I don't care if it costs $0.99 I will cancel if they have even one ad and I will pay up to $2-300 for no ads (including for other users because it creates a perverse incentive to collect user data and sell anyways). You want cheaper with ads? There is a myriad of services that provide that (although the cheap part is rare!)
> including for other users because it creates a perverse incentive to collect user data and sell anyways
Huh?
I don’t see Facebook or Google going around selling user data, it’s secret sauce they want to protect. Why would netflix sell user data if they start advertising? Wouldn’t that be more likely in a world where user data isn’t otherwise a major revenue source for them? (Although collecting user data is clearly already super important for netflix as they use it to design their content)
Because to netflix it is supplemental income, to fb and google it is their main income. Google and fb run their own ad network as well. Why would netflix not sell your interests in movies and habits to allow better targeting in their platform? If you get a no ad experience, why waste the opportunity? Sell it to others so they can target you elsewhere. That is, if they go down the ad road.
> Why would netflix not sell your interests in movies and habits to allow better targeting in their platform?
Why would they need to sell that data to allow better targeting? Doesn’t make sense.
> That is, if they go down the ad road.
Why would adding ads to Netflix force them to do these things that they would already be perfectly capable of doing? Netflix collects tons of data, could sell it if they wanted.
It wouldn't force them but if they are collecting data from users, why let it go to waste? They are capable of doing this now but they chose to accept subscription fees instead. If ads are acceptable to some users then collection of data valuable for advertising from all users is only logical since it is transparent for nearly all users and if you are not going to show some users ads then why waste the data collection when you can partner with ad platforms.
For example, your bank gives you a checking account, some require you to maintain some balance or a fee applies. They charge merchants when you use debit cards too, but they collect your payment info, at some point they all decided to sell your payment info to allow companies like google to connect targeting with purchases. Why waste precious data when you can monetize it ? (At least that is their reasoning I disagree with)
I mean, he's... technically right? Netflix could start showing ads, and increase revenue (either from creating a lower price tier that encourages more adoption, or by adding ads to the lowest price tier to increase revenue).
Of course, that's also the same logic that hundreds of tech companies have already "figured out" about ads. And it always ignores the knock-on effects of ads seeping into other price tiers, of ads taking priority over other features, etc. etc... that eventually destroy entire platforms and pieces of software.
It won't increase revenue if a large chunk of the currently subscribed-for-life people bail, it'll be eternally forfeited profits.
Just as a thought experiment - how many people currently subscribed would be subscribed for 30+ more years if they could just maintain what they have been doing for 30 years? The potential lifetime revenue is so huge it is a shame any time they do something that makes a lifetime subscriber bail on 30+ years of subscription payments without a second thought.
It's like they have the fish on the hook and they're debating if they can catch more fish by cutting the ones they have loose.
Now I'm scared of two things.
1) Netflix will start using product-placement in their original shows to boost revenue.
2) They're already doing this and I just haven't noticed.
Because asking a company to put ads on a product their already charge for, is such a sophisticated and unique take, dunno how this guy doesn't have a Pulitzer already. I don't think 3 dollars less of a monthly subscription justifies a truckload of shitty ads. Disgraceful.
Speaking of cable, if the quality of Netflix produced content would be comparable to the one of hbo or Disney I would even consider paying for it and watch ads. But I think Netflix subscriptions are going down because m, at least in my personal experience, the content is just offensively stupid, banal, childish and poor. Maybe the first step should be to product stuff that makes sense
It's the long term future of all streaming. After they increase subscription prices and their subscriber growth stops, they will still need to increase revenue.
So they will sell ads. In 20 years streaming will look like cable TV.
You need to seperate personal distaste for advertisement and objective analysis / business strategy. I hate ads as much as anyone, but I don't think the article sucks. Quite the opposite actually.
If I were an investor in Netflix, I would vote for this.
If Netflix goes too in for "background" with "ads", it will be watered down and completing with other Hollywood cops and TikTok alike. Too many completing concerns and it won't be able to serve all markets well.
So sure it could look good in the interim, and many corporate strategies do.
I get why Stratechery likes it on some level. Slaying the sacred cow here is like Intel deciding to do the iPhone as ARM. Put I think it's different, in that Intel was first in the lead and so would be good at a lower margin iPhone business, whereas Netflix has no real advantage over TikTok and whatever other background content competitors already exist.
Perhaps we should be looking at the strongest possible version of Stratechery’s argument (which also seems to be the one they presented).
Stratechery suggests that:
> markets like India have more room to grow, but much lower household incomes, and Netflix’s relatively high prices have been an obstacle.
> advertising-supported or subsidized tier would expand Netflix’s subscriber base, which is not only good for the company’s long-term growth prospects, but also competitive position when it comes to acquiring content.
>This also applies to the company’s recent attempts to crack down on password sharing, and struggles in the developing world: an advertising-based tier is a much more accessible alternative.
>[Ad-supported plans] would provide an alternative for marginal customers who might otherwise churn, and on the other hand, it would create a new benefit for those willing to pay (i.e. no advertising for the highest tiers).
Free tier vs paid tier always made perfect sense in theory, but what industry has actually pulled this off?
Newspapers? Hah. Spotify? Perhaps.
The problem with capital-gains-driven investment is Netflix can't just sit semi-sustainability at a steady share price and just pay out a dividend. Instead we're likely to see all sorts of jerking around until the business shoots itself in the foot.
But that’s clearly not what’s happening here, even if you disagree with the idea.
The title is consistent with the contents of the article. The contents of the article are not deliberately terrible, in fact they’re not terrible at all.
Unfortunately, even this changes. Lots of uploaders add subtitles, that pop up 2-3 times during a show "To download more movies, visist our site XXXX".
Well, it all starts somewhere. I am old enough to remember when private TV started in Germany in the 80s/90s - a 90 minute movie had exactly one ad break of 2-3 minutes. From there it "evolved" into 3-4 ad breaks, overlay ads mid-show, plus HbbTV overlay.
Same holds true for the Internet. In the 90s, there were 1-2 banners (animated GIFs), tops. It also evolved into intrusive tracking ads with flashy videos, sound etc.
My thesis is: Because you always get used to the ads and start to sub-concisely ignore them, they get more and more obtrusive to counter that effect. Its a race to the bottom, and my observations that I described above back this thesis.
They should play them after you've watch an episode of something, and the "Play next episode" button should immediately skip the ad. The ad volume should be normalized to the same as the episode (or lower), and the ads should have to match the same production specifications as Netflix shows. They should be like small, very short, unobtrusive films that advertise something.
So long as I remain in control of what I'm watching, I don't have to watch an ad to access content, the ad is high quality, and the ad comes after the thing I chose, then I'd accept ads on Netflix in the same way I would accept a trailer for a Netflix show.
I imagine that bar is probably set too high though.
I've found it to be very inconsistent. I've found that typically episodes will play credits and not auto-forward to the next episode. Movies will sometimes skip credits and move to trailers, sometimes not. I feel like usually they move to trailers. And movies is when I MOST want to watch credits and reflect on the movie, so Netflix is literally doing the opposite of what I want.
You can turn off auto-skipping to next episode, but depending on the platform you are watching on, it might still autopay trailers after a movie has finished.
Of course, but Netflix itself isn't really designed for that use case. The job of Netflix is to make content you want to watch, not to silence itself so you get some peace.
In your situation I'd use the sleep timer setting on the TV itself to automatically turn it off after a given time. It shouldn't be too hard to align it to match the end of the show.
Most sleep timers works in hours, maybe half hour increment. Looking up the length of a show, estimating when Netflix will interrupt end-credits, is completely unreasonable workaround.
the job of Netflix is to provide a product its customers want. i don't think OP is in a tiny minority of people who want an option to disable autoplay; it's a desire i've heard expressed quite often. hell, fucking YouTube, a service that exists to play ads and that plays more as you watch more videos, has an option to disable autoplay
Netflix gets away without doing this because it doesn't immediately lose them customers, and implementing it wouldn't really gain them any, but i am always quite at people who declare that it's therefore good. i need to figure out some tech service that's growth positive as a function to sacrificing its users' children to Moloch, just to watch the HN crowd cry "well, it's not the service's job to /not/ sacrifice your children to Moloch, and you can put them in an anti-Moloch safe room, so I personally don't see why they shouldn't keep sacrificing to Moloch the children of those that don't bother to go the extra mile to avoid it"
I've been paying for YouTube Premium ever since it became an option, it's basically the only way YouTube is tolerable. It's by fare the subscription I'm getting the most benefit from. If it was not available, my YouTube consumption would drop to damn near zero. When I see other browse YouTube with ads it feels like you're going mad, it's absolutely infuriating to witness.
It's difficult for me to see Netflix as being any different. I'm already not getting that much value from the service, so why should I pay if there where ads?
One fact which is often overlooked in the non-US markets is the lack of ads. For a service like YouTube, it's the same five ads over and over. There simply isn't enough inventory in the ad space to supply something like Netflix.
And ofcourse, most importantly, Netflix (or Disney or Prime or Max) with ads should be free (or really, really cheaper). With internet streaming, we consumers pay for the bandwidth to use any streaming service. And so if Netflix or Disney want to waste my bandwidth with ads, they better be willing to compensate me for it.
I asked my wife to cancel Hulu live recently because it was $85 USD/month with ads. Insane. She has one or two shows she likes to watch live so I suggested Sling Blue instead. Sling is OK for live stuff but anything on-demand is completely obnoxious with ads. We tried to watch an episode of Atlanta the other day and Sling injected more ads than the length of the show, eg it was longer than 30 minutes of ads to get through the 30 minute show. The inevitable that everyone said was going to happen is finally a reality - streaming platforms are back to where cable was 20 years ago.
> With internet streaming, we consumers pay for the bandwidth to use any streaming service. And so if Netflix or Disney want to waste my bandwidth with ads, they better be willing to compensate me for it.
You pay for electricity and TV companies have never compensated you for the electricity used during their commercials.
There are lots of occasions that we don't get compensated for things that have costs. For example, let's say you're driving in traffic. There's a stop light. Two cars from the other direction turn onto your street after their light has turned red ("it's been yellow for 3 seconds, but I don't wanna wait"). Your light turns green and a couple cars get through, but you have to wait another light cycle because of those two cars that illegally ran the red light. That's another minute or two of idle fuel usage. You don't get compensated for that and what the other drivers did was illegal. At least with Netflix you'd be agreeing to the ads and a price with a very real option of just not subscribing.
There are so many things that you pay for that you don't get compensated for in that micro-accounting way. Heavier vehicles destroy roads requiring them to be repaved a lot more, but the drivers of those heavier vehicles don't pay for that. We all do. It costs way more to deliver things to people in rural areas, but the USPS and many online stores will charge the same shipping for someone in Alaska or rural Montana as someone in NYC despite the fact that the person in Alaska might be only accessible by air and the person in rural Montana might be the only person receiving a package for 5 miles. They might be using $1 worth of fuel just on the end delivery for one person in an area like that, never mind the amount of time that it takes to deliver the packages in such a rural area. ($4/gallon of gas, 20 MPG fuel economy, and a 5 mile distance would be $1)
I'm not sure what your situation is (maybe you're on a really bandwidth restricted connection like HugesNet), but "we consumers pay for the bandwidth" is probably one of the smallest pieces of this world to worry about getting compensated for.
You cleverly avoid the fact that many of us also don't pay cable tv providers the equivalent of what we pay our electric providers. Internet streaming providers on the other hand already charge us as much, or even more than what we pay for our internet service.
If I see a netflix ad I cancel. Just like I did with hulu+ (the paid service), no way am I going to pay a video streaming to waste my time and bandwidth with ads.
Similarly first time I see a youtube ad, I'll cancel my youtube premium subscription.
I agree. Yet I feel compelled to say that the HN crowd is not necessarily representative of the general population. I've missed out on some great ideas I thought were dumb because I made the mistake of thinking my brain and interests are similar to others'.
While I agree, the world would probably better off if it was the case. I think back to a very popular comment about how Dropbox can be simplified to a few shell commands over FTP. There's simply too much useless software out there not solving real human problems.
The whole appeal of 'cutting the cord' was that you got better stuff at a lower price than cable. Netflix is now pricier than it used to be, and streaming bundles have arrived. Should ads come to Netflix, it's obvious to pretty much anyone that streaming has become what it was supposed to replace.
If about 33% of the users on the WWW use an adblocker, then its likely a considerable amount of them like convenient streaming without ads.
Netflix already contains advertising, btw. Its content does, such as product placement (a good example of which being Nokia in the original The Matrix though not Netflix specific). Heck, even Disney+ is advertising: for their merchandise. My kid digs 'Mini Mouse'.
What I am not interesting in is wasting my time on ads. I sort of accept it on Prime because I got Prime cheap, and its Prime Video products only. They're testing my limits though, I can tell you that much, and I can also tell you the ads are usually not appropriate for me (although I do have Prime for the Prime specific content, I find it on my own). The moment Netflix starts to waste my time with ads, it becomes less valuable. Because ads is the reason I avoid cable TV. I CBA with wasting my time on BS I don't want (to see). Its the reason I got Netflix in the first place. It makes the product less convenient, and pirating is already very convenient. It just feels better to pay for something while watching the people you paid for acting.
> If about 33% of the users on the WWW use an adblocker, then its likely a considerable amount of them like convenient streaming without ads.
I think WWW and streaming ads are too different to allow much meaningful cross inference.
On a web page with ads the ads are visible while you are trying to read the content, sometimes even overlaying it, and sometimes making noise and playing distracting animations.
On streaming (and on broadcast) the ad breaks usually alternate with the content or occur between acts in the content. When the content is actually playing the ads are not there.
This makes a huge difference. When an ad comes on between acts in a show, I simply pick up a book or my iPad until the next act starts in the show. I've always got things I want to do that I can make progress on in 2 or 3 minute segments so it is no big deal.
The article also argues that Netflix is constantly bumping up their prices, and this would further justify that by making the higher tiers seem more attractive.
Ads are only acceptable to me for purely ad-supported services.
If I have to reach for my credit card to view your content, you have to put the ads away. There is no in between for me. If you pull out ads on me, I will drop your service.
Netflix is full of ads, but you’re so used to them you don’t see them. I can’t remember what it was I watched the other night, but I definitely noticed the 45 second sequence of cereal box, bowl of cereal, cereal box, bowl of cereal, character going “mmm it’s delicious”, cereal box, end scene - and this is just one of many examples. Next Netflix production you watch, pay attention for the placements - there are a lot. Some subtle. Some as subtle as a hammer to the forehead.
With the removal of account sharing, with recent prices bump, more and more competition getting comfortable on the VOD market, they can't currently go all in at angrying their customers.
Rarely but Netflix produces good content sometimes and DRM won't protect it from getting pirated.
What this post misses is that there are a few people that will pay extra not to have commercials. So when Netflix starts to add ads to their offerings, and they will, they will have 2 tiers. A lower cost with commercials and the higher one with no commercials. It's the only way they can increase their earnings growth while keeping the subscription cost relatively low. I predict that with in 2 years we will see a Netflix with commercials.
What sorts of advertisers buy slots that only target consumers with less than a few dollars of disposable income per month?
Sadly, Amazon has the right idea here. Prime Video is (effectively) free, and a big chunk of the premium back catalog sits in IMDB TV, where ads are mandatory.
> What this post misses is that there are a few people that will pay extra not to have commercials.
And there are also people who will go back to using BitTorrent to not have commercials.
I wonder how the economics will work out there?
I'm currently paying for 4 streaming services because of how they've siloed various shows off. It'd probably only take one of them to start playing shitty broadcast tv style ads during things I'm watching for me to rage quit them all, and go back to downloading everything I watch and using shared Emby servers between a few friends.
The article specifically argues that they should do this in order to further grow their customer base, and retain customers that are unwilling to pay current prices.
Why couldn’t they keep existing subscribers ad-free? Those people are currently paying huge subscription fees.
Why would it be impossible for Netflix to implement advertising in the way this article suggests?
Of course it's not impossible, they could do it if they wanted to, but that's not what would happen. That's not how anyone does it. Inevitably they would add ads at approximately the current price, and raise the price of the ad-free tier.
First, who cares? This article isn’t about the consumers. Perhaps it would be great for the Netflix consumer if Netflix became a nonprofit?
Second, why? Why would this be bad for the Netflix consumer. Consumers willing to pay current sub fees shouldn’t be affected, and those unwilling to pay current prices would be able to access Netflix for less money.
This would obviously benefit consumers with less disposable income.
Your comments here make it pretty clear that you’re an ideologue who never intended to seriously engage with anyone anyway.
You hate advertising, therefore everything about this article is evil regardless of how correct it may be from a business perspective. You have no interest in debating the article, but only care about pursuing your holy war against advertising.
I think it’s pretty obvious that I did not create that account to break the site guidelines, but as an attempt to constructively engage with c0nduktr.
He didn’t like what I had to say, and chose to attack my account instead. While I might have been a little harsh in my reply to that, I said nothing that wasn’t perfectly in line with his comments.
Given the nature of his other comments under this post, and his choice to attack me over the age of my account it was certainly not unfair to point out his disinterest in engaging in a thoughtful conversation.
You can't abuse new users like this, even if you suspect they're not a genuine new user. We don't want HN to be hostile to outsiders. Welcoming new good-faith users is a thousand times more important than the irritation of serial trolls, so it's important to err on the side of the former.
Also, please see https://news.ycombinator.com/item?id=30925375, because what you did downthread was much worse yet. That's the sort of thing we ban people for, and I don't want to ban you.
I remember when Google had two, context relevant ads on the top of their searches. They were clearly marked as such and I could ignore them or use them if they looked intriguing. This has never been the case since. That industry is just out there trying to scam publishers, advertisers and users. It's horrific.
If Netflix had ads on top of the monthly service charge I'd cancel immediately. I stopped using YouTube on any device other than my Linux box where I can adblock everything.
It's very ironic because a lot of people paid for Netflix to "cut the cable" and not get commercials in the first place. Now you're saying they have to pay for that yet again?!
Just do live sports already. Netflix has proved that there is a limit that can be hit by chasing long-tail viewership alone. Sports content is extremly fresh and generally exclusive. This could then be re-packaged into 'Drive to survive' type show as well. Amazon already did this partially with 'The Test' in Cricket context.
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[ 3.5 ms ] story [ 278 ms ] threadNot all product information is advertisement.
Competition was incredibly fierce, it just came from cable TV.
The main subscriber base for Netflix was essentially folks who didn't want to see ads, and were willing to ditch cable tv for that experience.
Controlled viewing comparable to directTV / OnDemand was the main selling point. Being able to binge an entire show at will. Breaking Bad hitting its peak. I think they would have gotten away with it
Remove the advertisement / manipulation from the content and it's more valuable to the consumer.
Adam Smith, John Stuart Mill, and Karl Marx all agreed on the tendency of the rate of profit to fall.
https://wikipedia.org/wiki/Tendency_of_the_rate_of_profit_to...
https://en.wikipedia.org/wiki/Labor_theory_of_value
In credit to YouTube and Hulu, they give you the option to go ad free, or in the case of YouTube pay nothing at all. Have cheap price and ads, or pay a little more and get the ad free experience. I happily enjoy ad-free Netflix, YouTube and Hulu.
> I think this would break their brand and is more short-term thinking, i.e. "how do we increase value in the next quarter", rather than long-term thinking of how to keep growing as a company.
If you have read the article and try to respond to the authors points more directly, he is making a pretty compelling case as to why this is not short term thinking at all - subscriber growth is effectively over for the company now in the near term, there are little new customer households left to sell a subscription to for Netflix, which is of course why we are seeing more frequent subscription price rises too. On the contrary, he is laying out a long term strategy that may still deliver growth, something subscriptions increasingly won't as subscriber growth continues to inevitably fall.
As YouTube and Hulu both prove, one can have ad-supported and ad-free subscription tiers on the same service, and I suspect is likely the path Netflix would follow if they pursue such a plan in future. While as an individual you may not like ads (thats fine!), the slow down of subscriber growth at Netflix is pretty clear and will require a response from the business, which so far has been price rises...
Netflix has barely tapped its global potential (partially more and more users of countries come online world-wide), and many companies have experienced what they call "demand pulled forward", i.e. extra growth in pandemic that then falls as pandemic heads towards a close. This is short term, and he has assumed that the slow in growth is the "inevitable decline" of Netflix Subscriber growth.
Also, to be clear, I think Stratechery is an incredible source and usually agree with him. I don't in this case.
I wasn't trying to respond to his points more directly, I was taking on the perspective of what is good for the companies growth.
Just because you "happily enjoy ad-free Netflix, YouTube and Hulu." Doesn't mean most do (and there are strong statistical reasons that indicate that others enjoy it more as well).
The problem with this argument is it is not thought through. Expanding to newer markets is not about simply enabling credit card payment from those countries.
The performance in India (not good) proved recently it is about localizing the content. Creating or buying new content for these new market costs money, and then managing those (staffing up local orgs, local production center, data center, etc.) also costs.
Netflix is in content business, unlike software it is not about making copies and distributing world wide at zero cost.
You're correct it is a content business, they just spent 17 billion on new content, far more than any other streaming provider (and have the subscribers to support it). Specifically in India, with Indian creators, and it worked. It's in their book "No Rules Rules".
Netflix in India is the best example of an American company attempting to grow in India and failing because they don't have any understanding of the culture. Google, Apple, and even IKEA have figured this out. I'm sure Netflix will, too. But it'll take them a bit of time.
Just jiggle the projection of how many people would cancel, and whalla!! You can justify anything.
can't companies continue to exist on the number of subscribers that they have?
can they not reduce costs -- while continuing to service that # of subscribers -- to generate better returns for their shareholders? would such actions cause shareholder/investor revolt?
why?
> the slow down of subscriber growth at Netflix is pretty clear and will require a response from the business
how far does this go? when google or amazon or netflix or whomever has an active user account for almost all human beings on the planet, what then?
why DOES a business need to respond when their subscriber growth has passed the nadir for given market(s) at given tiers when the ROI for that business at those tiers and market volume is ~20% per quarter?
are those returns not enough? if the company (Netflix) could keep existing revenues at existing customer volumes while also reducing their infrastructure/delivery costs, would that not be enough??
would they NEED more customers?
why?
If you are not constantly growing then you will not have everyone with you, this is because new people reach adulthood. You want them in your service while still retaining the older ones.
In a steady state when all old population have your service and new ones are automatically adopting it, then you are a public utility (Ex. social security).
And when you are a public utility or essential service then you don't have to market yourself, it becomes money printing business and it is dividend company and not a stock growth one.
Unless something has changed and I'm unaware, this is not entirely true for Hulu. I've been paying for that plan for years and they definitely still play ads for select shows.
Edit: I think it has something to do with it being a network show that Hulu hosts the day after it airs on cable, or something, but they're definitely still there.
There's that *most* word.
In the US its $12.99 right now, and has been around a while: https://help.hulu.com/s/article/hulu-no-ads#hulu
They also have a $6.99 sub that does have ads, which may be what you are thinking is the only option? https://help.hulu.com/s/article/how-much-does-hulu-cost
To my knowledge no one can watch Hulu with ads and no sub like YouTube - all plans have a subscription, you just pay more to remove the ads.
> Due to streaming rights, there are a select number of shows from our streaming library that will play with a short ad break before and after each episode for Hulu (No Ads) subscribers
> Shows and movies from HBO, SHOWTIME, Cinemax, and STARZ don’t have ad breaks, but there may be promotional content before certain videos.
Almost every single streaming show from Hulu themselves without exceptions is ad-free on the 12.99 plan, exactly as the plan name says. In addition to understanding the support page, I use the service and the no-ad plan almost every day in my own home, it's definitely a thing and works exactly as its name (no ads!) suggests. Its probably why it's called the "no ads" plan...
Thats almost ad-free not ad-free.
Not entirely, though, for YouTube because paying doesn't remove the "And here's a word from our sponsor" segments that people are now using instead of ad breaks, right?
Options for their next move essentially boil down to:
(a) expand into "other bets" (e.g. games)
(b) compromise on the quality of their product and brand by selling ads to gain incremental revenue
(c) give up on growth and be happy with a large, sustainable business
They are openly pursuing (a), which is the ideal outcome. Ideally they can even launch gaming or some other form of entertainment as a separate subscription, helping to diversify their revenue.
I see (b) as the backup plan. If they're not able to diversify into another revenue source, their next best bet is to compromise their existing product and extract the final bit of juice using advertising. Some number of customers will drop down from paid to free, and that number is difficult to model. Netflix could also end up shooting themselves in the foot by introducing ads, if that convinces the whole industry to do the same. In the long run that will reduce margins for all.
Finally, (c) isn't compatible with the type of capitalist society we live in. Sometimes a company has peaked and that's OK.
>...it would create a new benefit for those willing to pay (i.e. no advertising for the highest tiers).
If they kept the existing $10/$15.50/$20 plans the same (https://help.netflix.com/en/node/24926), but they add a $5 ad-supported subscription, that's not changing anyone's experience, unless they choose to switch.
How those changes shake out is hard to predict. It's not a stretch to suggest that even little things change for everyone though. Adding ad revenue changes how a company thinks about nearly everything, whether they're aware of it or not, and ultimately the end user suffers.
For example, Netflix would likely start trying to tweak content discovery in a way that benefits advertisers. Rather than show me content that matches my historical interests, they show me content that optimizes ad revenue as well. It's unlikely they'd maintain two different "ad-free" and "ad-full" recommendation algorithms.
Motivated by pressure from advertisers, Netflix might be less inclined to produce or provide content that made advertisers uncomfortable or benefitted an advertiser's competitors.
When producing content, they now have two bosses: subscribers, and advertisers. Both have entirely different expectations. Those expectations push Netflix into making compromises, and rarely do those compromises produce outcomes that are better than if they only focused on making one side happy.
It's just more nuanced than "I don't want to watch shows with ads".
Nevertheless valid I think. In subscribing to Netflix (or continuing to do so in my case) the absence of ads has to be one of the considerations.
Now, presumably, Netflix doesn't take a cut of those today. Wouldn't be a stretch to imagine using product placement to offset the cost of producing Netflix Originals in the future, though.
The people who can afford the tier without advertising are exactly the people advertisers want to target.
1) Advertise "ad-less" platforms to them that contain subtle advertisements for expensive but effective ad-blocker systems - even augmented reality systems that can block most billboards etc.
2) Have a controlled arms race where ads get even more egregious and bypass the old ad blockers. Sell new ones etc.
3) Add really powerful, comprehensive features to ad blocker systems that absolutely beat all the ads, but they only perform well when integrated with new, up-to-date apple and tesla products.
I understand content generation is expensive. Maybe Netflix needs to expand more on the IPs they currently own? Merchandising and such (how about a LEGO/Stranger Things crossover anyone?) Differential pricing models for other countries would make sense too. I’m sure the board has thought of all of these and none are particularly easy, but putting ads where they don’t belong would ruin their brand.
I will pay netflix more than any cable company because the quality of their content.
Exploitative capitalism at its finest. Shortsighted greed with no room for imagination. I can spend 15 min and come up with at least 5 ways to charge customers more without needing to sell them ads. I don't care if it costs $0.99 I will cancel if they have even one ad and I will pay up to $2-300 for no ads (including for other users because it creates a perverse incentive to collect user data and sell anyways). You want cheaper with ads? There is a myriad of services that provide that (although the cheap part is rare!)
Huh?
I don’t see Facebook or Google going around selling user data, it’s secret sauce they want to protect. Why would netflix sell user data if they start advertising? Wouldn’t that be more likely in a world where user data isn’t otherwise a major revenue source for them? (Although collecting user data is clearly already super important for netflix as they use it to design their content)
Why would they need to sell that data to allow better targeting? Doesn’t make sense.
> That is, if they go down the ad road.
Why would adding ads to Netflix force them to do these things that they would already be perfectly capable of doing? Netflix collects tons of data, could sell it if they wanted.
For example, your bank gives you a checking account, some require you to maintain some balance or a fee applies. They charge merchants when you use debit cards too, but they collect your payment info, at some point they all decided to sell your payment info to allow companies like google to connect targeting with purchases. Why waste precious data when you can monetize it ? (At least that is their reasoning I disagree with)
Netflix already collects a huge amount of user data. Do they sell it now? I don’t know, maybe.
If Netflix launched an ad-supported subscription plan, why would that make them more likely to sell the data which they already collect?
I can’t see any obvious connection between selling ad spots and selling user data.
> Why waste precious data when you can monetize it ?
They have this data. They will continue to have this data if they don’t show ads, and they will also continue to have this data if they do show ads.
Why is the data not being wasted now? Why would the situation be different if Netflix offered ad-supported plans?
Of course, that's also the same logic that hundreds of tech companies have already "figured out" about ads. And it always ignores the knock-on effects of ads seeping into other price tiers, of ads taking priority over other features, etc. etc... that eventually destroy entire platforms and pieces of software.
Just as a thought experiment - how many people currently subscribed would be subscribed for 30+ more years if they could just maintain what they have been doing for 30 years? The potential lifetime revenue is so huge it is a shame any time they do something that makes a lifetime subscriber bail on 30+ years of subscription payments without a second thought.
It's like they have the fish on the hook and they're debating if they can catch more fish by cutting the ones they have loose.
Ignore this and don't click.
Copy cable TV business plan and theses users will just migrate elsewhere. Way to shot on your own foot.
So they will sell ads. In 20 years streaming will look like cable TV.
Classic kneejerk emotional reaction.
You need to seperate personal distaste for advertisement and objective analysis / business strategy. I hate ads as much as anyone, but I don't think the article sucks. Quite the opposite actually.
If I were an investor in Netflix, I would vote for this.
If Netflix goes too in for "background" with "ads", it will be watered down and completing with other Hollywood cops and TikTok alike. Too many completing concerns and it won't be able to serve all markets well.
So sure it could look good in the interim, and many corporate strategies do.
I get why Stratechery likes it on some level. Slaying the sacred cow here is like Intel deciding to do the iPhone as ARM. Put I think it's different, in that Intel was first in the lead and so would be good at a lower margin iPhone business, whereas Netflix has no real advantage over TikTok and whatever other background content competitors already exist.
Stratechery suggests that:
> markets like India have more room to grow, but much lower household incomes, and Netflix’s relatively high prices have been an obstacle.
> advertising-supported or subsidized tier would expand Netflix’s subscriber base, which is not only good for the company’s long-term growth prospects, but also competitive position when it comes to acquiring content.
>This also applies to the company’s recent attempts to crack down on password sharing, and struggles in the developing world: an advertising-based tier is a much more accessible alternative.
>[Ad-supported plans] would provide an alternative for marginal customers who might otherwise churn, and on the other hand, it would create a new benefit for those willing to pay (i.e. no advertising for the highest tiers).
Newspapers? Hah. Spotify? Perhaps.
The problem with capital-gains-driven investment is Netflix can't just sit semi-sustainability at a steady share price and just pay out a dividend. Instead we're likely to see all sorts of jerking around until the business shoots itself in the foot.
Low margin, boring, ubiquitous, essential.
This is the highest award society bestows on a good service.
The title is consistent with the contents of the article. The contents of the article are not deliberately terrible, in fact they’re not terrible at all.
Same holds true for the Internet. In the 90s, there were 1-2 banners (animated GIFs), tops. It also evolved into intrusive tracking ads with flashy videos, sound etc.
My thesis is: Because you always get used to the ads and start to sub-concisely ignore them, they get more and more obtrusive to counter that effect. Its a race to the bottom, and my observations that I described above back this thesis.
But...
They should play them after you've watch an episode of something, and the "Play next episode" button should immediately skip the ad. The ad volume should be normalized to the same as the episode (or lower), and the ads should have to match the same production specifications as Netflix shows. They should be like small, very short, unobtrusive films that advertise something.
So long as I remain in control of what I'm watching, I don't have to watch an ad to access content, the ad is high quality, and the ad comes after the thing I chose, then I'd accept ads on Netflix in the same way I would accept a trailer for a Netflix show.
I imagine that bar is probably set too high though.
You can turn off auto-skipping to next episode, but depending on the platform you are watching on, it might still autopay trailers after a movie has finished.
In your situation I'd use the sleep timer setting on the TV itself to automatically turn it off after a given time. It shouldn't be too hard to align it to match the end of the show.
Most sleep timers works in hours, maybe half hour increment. Looking up the length of a show, estimating when Netflix will interrupt end-credits, is completely unreasonable workaround.
the job of Netflix is to provide a product its customers want. i don't think OP is in a tiny minority of people who want an option to disable autoplay; it's a desire i've heard expressed quite often. hell, fucking YouTube, a service that exists to play ads and that plays more as you watch more videos, has an option to disable autoplay
Netflix gets away without doing this because it doesn't immediately lose them customers, and implementing it wouldn't really gain them any, but i am always quite at people who declare that it's therefore good. i need to figure out some tech service that's growth positive as a function to sacrificing its users' children to Moloch, just to watch the HN crowd cry "well, it's not the service's job to /not/ sacrifice your children to Moloch, and you can put them in an anti-Moloch safe room, so I personally don't see why they shouldn't keep sacrificing to Moloch the children of those that don't bother to go the extra mile to avoid it"
It's like the income tax. First for only the wealthy, then the tax "trickles down" to everyone.
"In this world nothing can be said to be certain, except death, taxes and ads."
It's difficult for me to see Netflix as being any different. I'm already not getting that much value from the service, so why should I pay if there where ads?
One fact which is often overlooked in the non-US markets is the lack of ads. For a service like YouTube, it's the same five ads over and over. There simply isn't enough inventory in the ad space to supply something like Netflix.
You pay for electricity and TV companies have never compensated you for the electricity used during their commercials.
There are lots of occasions that we don't get compensated for things that have costs. For example, let's say you're driving in traffic. There's a stop light. Two cars from the other direction turn onto your street after their light has turned red ("it's been yellow for 3 seconds, but I don't wanna wait"). Your light turns green and a couple cars get through, but you have to wait another light cycle because of those two cars that illegally ran the red light. That's another minute or two of idle fuel usage. You don't get compensated for that and what the other drivers did was illegal. At least with Netflix you'd be agreeing to the ads and a price with a very real option of just not subscribing.
There are so many things that you pay for that you don't get compensated for in that micro-accounting way. Heavier vehicles destroy roads requiring them to be repaved a lot more, but the drivers of those heavier vehicles don't pay for that. We all do. It costs way more to deliver things to people in rural areas, but the USPS and many online stores will charge the same shipping for someone in Alaska or rural Montana as someone in NYC despite the fact that the person in Alaska might be only accessible by air and the person in rural Montana might be the only person receiving a package for 5 miles. They might be using $1 worth of fuel just on the end delivery for one person in an area like that, never mind the amount of time that it takes to deliver the packages in such a rural area. ($4/gallon of gas, 20 MPG fuel economy, and a 5 mile distance would be $1)
I'm not sure what your situation is (maybe you're on a really bandwidth restricted connection like HugesNet), but "we consumers pay for the bandwidth" is probably one of the smallest pieces of this world to worry about getting compensated for.
Similarly first time I see a youtube ad, I'll cancel my youtube premium subscription.
If anything the need for piracy or ad blocking led to a lot of people learning tech skills they would otherwise be completely uninterested in.
Netflix already contains advertising, btw. Its content does, such as product placement (a good example of which being Nokia in the original The Matrix though not Netflix specific). Heck, even Disney+ is advertising: for their merchandise. My kid digs 'Mini Mouse'.
What I am not interesting in is wasting my time on ads. I sort of accept it on Prime because I got Prime cheap, and its Prime Video products only. They're testing my limits though, I can tell you that much, and I can also tell you the ads are usually not appropriate for me (although I do have Prime for the Prime specific content, I find it on my own). The moment Netflix starts to waste my time with ads, it becomes less valuable. Because ads is the reason I avoid cable TV. I CBA with wasting my time on BS I don't want (to see). Its the reason I got Netflix in the first place. It makes the product less convenient, and pirating is already very convenient. It just feels better to pay for something while watching the people you paid for acting.
I think WWW and streaming ads are too different to allow much meaningful cross inference.
On a web page with ads the ads are visible while you are trying to read the content, sometimes even overlaying it, and sometimes making noise and playing distracting animations.
On streaming (and on broadcast) the ad breaks usually alternate with the content or occur between acts in the content. When the content is actually playing the ads are not there.
This makes a huge difference. When an ad comes on between acts in a show, I simply pick up a book or my iPad until the next act starts in the show. I've always got things I want to do that I can make progress on in 2 or 3 minute segments so it is no big deal.
Youtube has ads for the lower tiers, yet you’re still subscribed.
This article is explicitly not arguing that Netflix should show ads to existing subscribers like yourself.
The article also argues that Netflix is constantly bumping up their prices, and this would further justify that by making the higher tiers seem more attractive.
If I have to reach for my credit card to view your content, you have to put the ads away. There is no in between for me. If you pull out ads on me, I will drop your service.
Rarely but Netflix produces good content sometimes and DRM won't protect it from getting pirated.
Sadly, Amazon has the right idea here. Prime Video is (effectively) free, and a big chunk of the premium back catalog sits in IMDB TV, where ads are mandatory.
And there are also people who will go back to using BitTorrent to not have commercials.
I wonder how the economics will work out there?
I'm currently paying for 4 streaming services because of how they've siloed various shows off. It'd probably only take one of them to start playing shitty broadcast tv style ads during things I'm watching for me to rage quit them all, and go back to downloading everything I watch and using shared Emby servers between a few friends.
It suggests that Netflix should offer an ad-supported plan for people unwilling to pay current prices.
Why couldn’t they keep existing subscribers ad-free? Those people are currently paying huge subscription fees.
Why would it be impossible for Netflix to implement advertising in the way this article suggests?
Second, why? Why would this be bad for the Netflix consumer. Consumers willing to pay current sub fees shouldn’t be affected, and those unwilling to pay current prices would be able to access Netflix for less money.
This would obviously benefit consumers with less disposable income.
Your comments here make it pretty clear that you’re an ideologue who never intended to seriously engage with anyone anyway.
You hate advertising, therefore everything about this article is evil regardless of how correct it may be from a business perspective. You have no interest in debating the article, but only care about pursuing your holy war against advertising.
https://news.ycombinator.com/newsguidelines.html
If you'd please review https://news.ycombinator.com/newsguidelines.html and stick to the rules, we'd appreciate it.
https://news.ycombinator.com/newsguidelines.html
He didn’t like what I had to say, and chose to attack my account instead. While I might have been a little harsh in my reply to that, I said nothing that wasn’t perfectly in line with his comments.
It’s not unfair to call him an ideologue, he admits to hating the advertising industry https://news.ycombinator.com/item?id=30916159
Given the nature of his other comments under this post, and his choice to attack me over the age of my account it was certainly not unfair to point out his disinterest in engaging in a thoughtful conversation.
Everyone always feels that the other person started it and did worse. Those perceptions aren't reliable, and they're a recipe for a downward spiral.
If you want to participate here, you need to follow the site guidelines regardless of what anyone else does.
https://news.ycombinator.com/newsguidelines.html
Also, please see https://news.ycombinator.com/item?id=30925375, because what you did downthread was much worse yet. That's the sort of thing we ban people for, and I don't want to ban you.
https://news.ycombinator.com/newsguidelines.html
I hate the advertising industry.
Advertisements are a service-killer for me, and when that happens I'll also share my ad-free files with everyone I know.
If Netflix had ads on top of the monthly service charge I'd cancel immediately. I stopped using YouTube on any device other than my Linux box where I can adblock everything.