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I think people are missing the suggestion of this article. It's not suggesting that Netflix adds advertising to the existing subscriptions; it's suggesting they

by zck 5y ago

I think people are missing the suggestion of this article. It's not suggesting that Netflix adds advertising to the existing subscriptions; it's suggesting they add a lower-priced subscription supported by ads. >...it would create a new benefit for those willing to pay (i.e. no advertising for the highest tiers). If they kept the existing $10/$15.50/$20 plans the same (https://help.netflix.com/en/node/24926 https://help.netflix.com/en/node/24926), but they add a $5 ad-supported subscription, that's not changing anyone's experience, unless they choose to switch.

buffington 5y ago
Everyone's experience changes when a company begins to consider ad revenue. How those changes shake out is hard to predict. It's not a stretch to suggest that even little things change for everyone though. Adding ad revenue changes how a company thinks about nearly everything, whether they're aware of it or not, and ultimately the end user suffers. For example, Netflix would likely start trying to tweak content discovery in a way that benefits advertisers. Rather than show me content that matches my historical interests, they show me content that optimizes ad revenue as well. It's unlikely they'd maintain two different "ad-free" and "ad-full" recommendation algorithms. Motivated by pressure from advertisers, Netflix might be less inclined to produce or provide content that made advertisers uncomfortable or benefitted an advertiser's competitors. When producing content, they now have two bosses: subscribers, and advertisers. Both have entirely different expectations. Those expectations push Netflix into making compromises, and rarely do those compromises produce outcomes that are better than if they only focused on making one side happy.
- zck 5y ago
  This is a fair critique! It's just more nuanced than "I don't want to watch shows with ads".
  - formerkrogeremp 5y ago
    And we'll being going to piracy if we had to watch ads on top of paying a monthly fee. This would be ridiculous. There's advertising almost everywhere else. Why do we need more advertising?
    - blooalien 5y ago
      Pretty sure the advertising industry won't be happy until every human on the planet is required by law to tolerate 24/7 advertising beamed directly into their brains.
  - jeegsy 5y ago
    > It's just more nuanced than "I don't want to watch shows with ads". Nevertheless valid I think. In subscribing to Netflix (or continuing to do so in my case) the absence of ads has to be one of the considerations.
  - c0nducktr 5y ago
    I'd wager most people here are aware of what happens when advertising enters the conversation.
- mr3martinis 5y ago
  Well put. Not to mention that once the platform and business support ads, it's a slippery slope. No ads on the top tier quickly becomes "We'll just show limited ads to the top tier to make up this quarter's shortfall," and so on from there.
- manmal 5y ago
  Just adding one thing: Some Netflix productions already contain product placements. The Tinder Swindler is a giant Google + Apple ad.
  - maguay 5y ago
    Many Korean series on Netflix (including ones branded as Netflix Originals, though they may only show that outside of their home region) that are set in the modern day include product placement, as of course do plenty of Hollywood feature films included on Netflix. Now, presumably, Netflix doesn't take a cut of those today. Wouldn't be a stretch to imagine using product placement to offset the cost of producing Netflix Originals in the future, though.
_8j50 5y ago
No! At any freaking tier. What stops them from starting to sell data from other tiers? It will become part if their business model and will eat away everything they do, including content creation. Put that cancer back in pandora's box please!
random314 5y ago
This doesn't solve the paid vs ad supported conundrum. The ads produce lesser revenue when targeting leaner wallets. It can kill the brand and not produce significant revenue like YouTube.
tonyedgecombe 5y ago
The trouble is advertisers aren't very interested in people who can only afford the lowest tier. Somebody who can only afford that isn't going to be in the market for a Tesla or MacBook or any other product. The people who can afford the tier without advertising are exactly the people advertisers want to target.
- JetAlone 5y ago
  And they want to not be advertised to, so the power move would be to: 1) Advertise "ad-less" platforms to them that contain subtle advertisements for expensive but effective ad-blocker systems - even augmented reality systems that can block most billboards etc. 2) Have a controlled arms race where ads get even more egregious and bypass the old ad blockers. Sell new ones etc. 3) Add really powerful, comprehensive features to ad blocker systems that absolutely beat all the ads, but they only perform well when integrated with new, up-to-date apple and tesla products.
- jeroenhd 5y ago
  Not necessarily; there's a depressingly large group of people who have terrible control over their finances and are poor because they're easily influenced into buying expensive items. Definitely not the main source of poverty, but a great target audience for advertisers to manipulate.
MisterBastahrd 5y ago
That doesn't jive with any subscription plan I've seen from any of these companies. Far more likely that they jack up the rates on the pure subscription plans and then carve out a slightly lower priced tier with ad support.
TheRealNGenius 5y ago
Yeah totally! This guy who writes tech/sv vc content totally knows better than a multi-billion dollar industry leader who pioneered their business model on what they should do amirite? /s

by zck 5y ago

buffington 5y ago

Everyone's experience changes when a company begins to consider ad revenue. How those changes shake out is hard to predict. It's not a stretch to suggest that even little things change for everyone though. Adding ad revenue changes how a company thinks about nearly everything, whether they're aware of it or not, and ultimately the end user suffers. For example, Netflix would likely start trying to tweak content discovery in a way that benefits advertisers. Rather than show me content that matches my historical interests, they show me content that optimizes ad revenue as well. It's unlikely they'd maintain two different "ad-free" and "ad-full" recommendation algorithms. Motivated by pressure from advertisers, Netflix might be less inclined to produce or provide content that made advertisers uncomfortable or benefitted an advertiser's competitors. When producing content, they now have two bosses: subscribers, and advertisers. Both have entirely different expectations. Those expectations push Netflix into making compromises, and rarely do those compromises produce outcomes that are better than if they only focused on making one side happy.

zck 5y ago
This is a fair critique! It's just more nuanced than "I don't want to watch shows with ads".
- formerkrogeremp 5y ago
  And we'll being going to piracy if we had to watch ads on top of paying a monthly fee. This would be ridiculous. There's advertising almost everywhere else. Why do we need more advertising?
  - blooalien 5y ago
    Pretty sure the advertising industry won't be happy until every human on the planet is required by law to tolerate 24/7 advertising beamed directly into their brains.
- jeegsy 5y ago
  > It's just more nuanced than "I don't want to watch shows with ads". Nevertheless valid I think. In subscribing to Netflix (or continuing to do so in my case) the absence of ads has to be one of the considerations.
- c0nducktr 5y ago
  I'd wager most people here are aware of what happens when advertising enters the conversation.
mr3martinis 5y ago
Well put. Not to mention that once the platform and business support ads, it's a slippery slope. No ads on the top tier quickly becomes "We'll just show limited ads to the top tier to make up this quarter's shortfall," and so on from there.
manmal 5y ago
Just adding one thing: Some Netflix productions already contain product placements. The Tinder Swindler is a giant Google + Apple ad.
- maguay 5y ago
  Many Korean series on Netflix (including ones branded as Netflix Originals, though they may only show that outside of their home region) that are set in the modern day include product placement, as of course do plenty of Hollywood feature films included on Netflix. Now, presumably, Netflix doesn't take a cut of those today. Wouldn't be a stretch to imagine using product placement to offset the cost of producing Netflix Originals in the future, though.

_8j50 5y ago

No! At any freaking tier. What stops them from starting to sell data from other tiers? It will become part if their business model and will eat away everything they do, including content creation. Put that cancer back in pandora's box please!

random314 5y ago

This doesn't solve the paid vs ad supported conundrum. The ads produce lesser revenue when targeting leaner wallets. It can kill the brand and not produce significant revenue like YouTube.

tonyedgecombe 5y ago

The trouble is advertisers aren't very interested in people who can only afford the lowest tier. Somebody who can only afford that isn't going to be in the market for a Tesla or MacBook or any other product. The people who can afford the tier without advertising are exactly the people advertisers want to target.

JetAlone 5y ago
And they want to not be advertised to, so the power move would be to: 1) Advertise "ad-less" platforms to them that contain subtle advertisements for expensive but effective ad-blocker systems - even augmented reality systems that can block most billboards etc. 2) Have a controlled arms race where ads get even more egregious and bypass the old ad blockers. Sell new ones etc. 3) Add really powerful, comprehensive features to ad blocker systems that absolutely beat all the ads, but they only perform well when integrated with new, up-to-date apple and tesla products.
jeroenhd 5y ago
Not necessarily; there's a depressingly large group of people who have terrible control over their finances and are poor because they're easily influenced into buying expensive items. Definitely not the main source of poverty, but a great target audience for advertisers to manipulate.

MisterBastahrd 5y ago

That doesn't jive with any subscription plan I've seen from any of these companies. Far more likely that they jack up the rates on the pure subscription plans and then carve out a slightly lower priced tier with ad support.

TheRealNGenius 5y ago

Yeah totally! This guy who writes tech/sv vc content totally knows better than a multi-billion dollar industry leader who pioneered their business model on what they should do amirite? /s