Netflix is Introducing Advertisements to a Conflicted Audience

Image: Ign.com

BY ANNA BOWMAN

In the days where most entertainment was digested primarily through television, online streaming was only just burgeoning. Television viewers griped about lengthy commercial breaks and how much they took away from their amusement based on what they were watching, but they were correct on their complaints: since 2017, the number of advertisements squeezed into a show's broadcast time has increased. The American public is being exposed to more advertising than ever before, even when solely basing the intake on television viewing.

Commercial breaks and the complaints surrounding them pushed people to inevitably jump on the bandwagon of streaming services when they became popular. Many people "cut the cord" to their cable providers and strictly stuck to services like Netflix, Hulu and Amazon's Prime Video in order to keep up with their preferred entertainment; in a survey conducted by Deloitte, a consulting firm, 88% of millennials subscribed to internet video while 50% paid for television. The numbers are similar for Gen Z, where 80% subscribe to Internet video whilst 57% pay for television. For many in this age group, the appeal of Internet streaming services to cable television rests mostly in its cost: the expense of a subscription is less expensive than paying for cable. There aren't many downsides to switching to streaming services--you can get any show you'd like at any time.

The most popular entertainment streaming service is Netflix, which has been advertisement-free since its conception in the streaming world. Recent demand and the threat of upcoming competition has brought about the idea of implementing advertisements in their service, which has been a big controversy among many internet users. However big the opposition may be, a Digital Trends article by Ryan Waniata attempts to reconcile the controversy by suggesting ways in which the introduction of advertisements onto Netflix's platform is a beneficial thing.

Image: Newsledge.com

Waniata opens by citing a study published by TDG research, which states that 17% of Netflix's current subscriber base (an estimated 10 million users) would consider an ad-based Netflix subscription. While this may seem like a weak statistic to start out with, the proposition of having an ad-based and ad-free subscription tier is likely something that Netflix would implement--especially considering its competitors--Hulu and HBO Now, for instance--offer similar details in their subscription tiers.

Additionally, Netflix's listed prices on their subscriptions won't be the cheapest come Disney+'s release, which now holds many properties its predecessor once did (Star Wars, Marvel, Pixar, etc). The starting price for Disney+ is a predicted $7, which is $2 less than Netflix's tier for standard definition, yet offers benefits like 4K HDR streaming. For Netflix to be able to continue allocating as much funding as it has been for producing and acquiring new content for its platform, it needs to grow in order to survive in the emerging climate within the world of streaming services. Upcoming start-ups prove to be viable competitors for the company already, though Netflix has been able to prove its resilience once before when it converted from being a DVD rental business to a domestic streamer. Would Netflix be able to smoothly introduce ad-based subscription tiers to its user base and continue to rake in the same numbers it does now? Perhaps, but only if it goes about doing so in the right way. People on the Internet already have such an aversion to advertisements and anything similar--to keep the appeal of its userbase, Netflix may not be able to abruptly force traditional commercial breaks onto its audience.