Netflix is planning to ditch the playing of ads forever, while numerous other streaming services have no problem in offering ad-supported and ad-free content versions to its users.
On Monday, at the IAB’s Digital Content NewFronts, the executives of various streaming service providers such as YouTube, media agency UM, media link, and JPMorgan Chase gave their opinion stating that Netflix will have to allow ads in order to grow and survive. Kristin Lemkau of JPMorgan Chase says that people with an understanding of value exchange won’t have any problem with ad-supported content if enough of transparency is being maintained.
Consumers are searching for choices and seek for something that brings value to them. Considering subscription and the non-subscription version against each other, people are likely to prefer a compromise. Joshua Lowcock who belongs to Media agency UM, a global brand safety officer and also the U.S chief digital and innovation officer at Interpublic Group’s agency has a firm opinion that Netflix will have to play ads in near future. He elaborates further saying that as a person who grew in this digital age, ads should be put at every possible place. That’s why the ad blockers and efforts to achieve ad-free space are seen everywhere. Considering Netflix’s content cost, new ad formats will have to come in.
In the shareholder letter, Netflix admits to having not anticipated the entry of Apple and Disney in the streaming industry and has declared that this will affect their growth due to the sudden rise in the demand of entertainment from people and the difference in the nature of contents and variety offered by its new competitors.
Netflix has already begun to suffer, considering a 1% drop in its stock prior to this month which; seen after the report of its 1st quarter earnings.
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