Netflix: king of streaming, loser of advertising

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After years of shouting loudly that it was the equivalent of television without advertising, Netflix finally gave in to the lure of profit and the sirens of advertising. Thus, since November 2022, the leader in video streaming has been offering a cheaper offer with some advertising breaks to its subscribers.

Although this decision caused a lot of ink to be spilled, arousing the anger and disappointment of many Internet users, it is clear that Netflix was right. A year and a half after the launch of the Netflix Essential formula with advertising, the platform has 40 million active users. But this success is relative. If Netflix remains the king of streaming platforms, it flounders when it comes to advertising revenue.

Far behind the competition

The streaming market is evolving. After having disrupted the way we consume series and films and having entered most homes around the world, streaming platforms need a revival and have had to make a drastic change in strategy. Today, the time is no longer for amassing new subscribers by offering lower prices. We must succeed in convincing the last die-hards…

From the first months, Netflix boasted: its advertising-supported offer works. And works well! A year and a half after its launch, the platform continues to tout the success of its plan. It announces 40 million subscribers to its offer with advertising. Better ? 40% of its new customers choose the Netflix Essential formula with advertising.

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Netflix can also congratulate itself on having influenced the market. After the announcement of the arrival of advertising on the red N platform and given the success of this decision, the competition had to follow the trend. Thus, Disney+ and Prime Video now offer offers including advertising intermissions.

In fact, Netflix still has a lot to learn when it comes to advertising. Indeed, according to a study published by Bloomberg, Netflix is ​​said to be far behind its competitors in terms of video ad sales. Next to YouTube ($13 billion), Disney ($8.7 billion), Paramount ($7.6 billion) or Warner Bros. Discovery ($7 billion), Netflix and its approximately $400 million generated look really pale in comparison. Even Amazon easily surpasses it with $1.1 billion generated.

Although they got into advertising after Netflix, Netflix's main competitors have a little more experience in the advertising field, and a more solid model. And this is strongly felt. Despite a colossal partnership with Microsoft, Netflix is ​​experiencing some difficulties and has not managed to achieve its objectives. Enough to cool down advertisers who do not necessarily see Netflix as the promised El Dorado.

This is why Netflix is ​​considering a 100% free offer that would be entirely financed by advertising. For the moment, it is only an idea, but it could well catch on… Let us point out that Netflix wants to take off and free itself from Microsoft. But is separating from a key player to launch your own advertising technology platform really the right idea ?

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