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For years, Netflix snubbed advertising, preferring to rely exclusively on subscriptions. But as the company grows, it finds it increasingly difficult to sustain growth. In 2022, SVOD finally launched a new affordable offer which is partly financed by the user's subscription, and partly financed by advertising. In addition to the fact that this subscription allows Netflix to attract new subscribers (or keep existing subscribers), advertising is also a very lucrative activity for the company.
And currently, it is even discussing internally the possibility of launching an offer entirely financed by advertising, and which would be 100% free. In any case, this is what an article recently published by Bloomberg indicates. Netflix has already tested a free version of its platform in Kenya, before ending this experiment. And, citing sources close to the matter, the American agency explains that Netflix is discussing a possible free offer to boost its number of users in Europe and Asia. However, Bloomberg clarifies that for the moment, these are only discussions, but not a well-defined plan. Furthermore, as usual, given that this information does not come from an official source, caution remains in order.
Why would Netflix launch a version free ?
Netflix is today the leader in its market. And the affordable subscription, partially financed by advertising, is becoming a hit. In May, the company revealed that this subscription with advertisements has already exceeded 40 million subscribers, while it only had 23 million in January. And a year earlier, this offer only had 5 million subscribers. Netflix has also indicated that more than 40% of new subscriptions come from the advertising-supported offer, in countries where this offer is available.
200% Deposit Bonus up to €3,000 180% First Deposit Bonus up to $20,000However, Netflix would like to further increase the audience that advertisers can target via its advertising platform (developed with Microsoft). Indeed, this audience would still be small compared to that of its competitors in the field of online advertising. And a free version entirely financed by advertising could allow the company to achieve the new goals. On the other hand, such an offer would allow Netflix to reach users who cannot afford a subscription, or who do not have an online payment method.
In any case, on a financial level, a free version 100% financed by advertising could boost the company's revenue. After launching the basic subscription with advertisements, Netflix realized that online advertising is very lucrative. In April 2023, the company revealed, during the presentation of its financial results, that a user of the offer with advertising generates more revenue than a user of the Essential offer without advertising, which pay more. Furthermore, this Essential offer has been removed this year. And in the United States, a subscriber who sees ads would even generate more money for Netflix than a Premium subscriber.
- According to Bloomberg, Netflix is “discussing” a 100% free version thanks to advertising
- However, this would still only be discussion, without a defined plan, for the moment
- According to the latest official figures, Netflix's ad-supported subscription already has more than 40 million members, but Netflix would like to further increase the audience that advertisers can target with its advertising platform
- After launching its affordable and partially ad-supported offering, Netflix realized that the business model is extremely lucrative
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