Netflix to Diversify into Selling Ads

Image Source: Agenhoy

Netflix’s stock is still suffering after losing customers for the first time in more than a decade last month. 

Analysts have proposed adding advertisements and cracking down on password sharing to shift the narrative back in its favor. However, one way for Netflix to rescue itself is to form a partnership with a sector with which it was formerly at odds: movie theaters. 

Despite the fact that Netflix has released several films in theaters and even purchased a handful, the majority of its theater releases have been purposely limited. Now that the streamer is healing and theaters are slowly recovering from the plague, it may be time for both sides to join together. Although there is no definite date for implementation, it has been made public. In the meantime, the streaming platform plans to introduce cheaper rates and ad support to stem the tide of dwindling stock. 

This was made public in April when Netflix CEO Reed Hastings surprised the media and advertising world by announcing in April that the company was open to introducing advertisements to the service in response to a drop in stock. Hastings has refused to allow advertisements on the platform for years. 

Those who have followed Netflix know that I am opposed to complexity in advertising and a strong supporter of subscription simplicity. However, as much as I support it, I am a firm believer in consumer choice. ” Hastings noted in a post-earnings call last month. So it also makes sense to let customers who choose a lower price and are willing to put up with advertising get what they want.

Hastings said in April that Netflix was looking into ways to bring advertisements to the service “over the next year or two.” However, it appears that the process is accelerating. Netflix, which declined to comment for this article, is looking for new methods to raise money, stop the bleeding on Wall Street, and modify the perception of its stock. 

Investors were worried by the news, and Netflix shares dropped 1% after Hastings’ announcement. Prior to the New York Times article, stock market analysts noted that shares were higher. 

Netflix is considering restricting password sharing among its customers as a potential revenue stream to compensate for declining stock and revenue. According to reports, Netflix told employees that the password project would start around the same time as the ad-tier debut. 

In March, the company claimed that it had spent a year developing ways to “enable members who share beyond their family to do so conveniently and safely, while also paying a little more.” 

Netflix claimed in April that it has 221 million subscribers, making it the streaming market leader, but that it lost 200,000 subscribers in the first quarter of 2022. As if that wasn’t bad enough, the company then revealed that it expects to lose another two million dollars in the second quarter. 

Due to subscriber losses and weak estimates, investors are questioning Netflix’s and the streaming industry’s future growth.

Opinions expressed by San Francisco Post contributors are their own.

Allison Corrigan

I’m Allison and I am human rights activist and LGBTQIA+ defender. I finished my degree graduate studies on Public Administration and I spend most of my free time in contributing written works about community development, public administration and lifestyle.

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