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> While many competitors do this (Hulu, YouTube), it's a terrible experience and I've seen both myself and others simply turn to Netflix to avoid the ads In cr

by giobox 5y ago

> While many competitors do this (Hulu, YouTube), it's a terrible experience and I've seen both myself and others simply turn to Netflix to avoid the ads In credit to YouTube and Hulu, they give you the option to go ad free, or in the case of YouTube pay nothing at all. Have cheap price and ads, or pay a little more and get the ad free experience. I happily enjoy ad-free Netflix, YouTube and Hulu. > I think this would break their brand and is more short-term thinking, i.e. "how do we increase value in the next quarter", rather than long-term thinking of how to keep growing as a company. If you have read the article and try to respond to the authors points more directly, he is making a pretty compelling case as to why this is not short term thinking at all - subscriber growth is effectively over for the company now in the near term, there are little new customer households left to sell a subscription to for Netflix, which is of course why we are seeing more frequent subscription price rises too. On the contrary, he is laying out a long term strategy that may still deliver growth, something subscriptions increasingly won't as subscriber growth continues to inevitably fall. As YouTube and Hulu both prove, one can have ad-supported and ad-free subscription tiers on the same service, and I suspect is likely the path Netflix would follow if they pursue such a plan in future. While as an individual you may not like ads (thats fine!), the slow down of subscriber growth at Netflix is pretty clear and will require a response from the business, which so far has been price rises...

KerryJones 5y ago
I did read the article thoroughly, and I think he hasn't seen the larger perspective. I'm an investor in Netflix, and have also dug deeply into many other in-depth analyses of them, and while he says its "long-term", that doesn't mean it is. Netflix has barely tapped its global potential (partially more and more users of countries come online world-wide), and many companies have experienced what they call "demand pulled forward", i.e. extra growth in pandemic that then falls as pandemic heads towards a close. This is short term, and he has assumed that the slow in growth is the "inevitable decline" of Netflix Subscriber growth. Also, to be clear, I think Stratechery is an incredible source and usually agree with him. I don't in this case. I wasn't trying to respond to his points more directly, I was taking on the perspective of what is good for the companies growth. Just because you "happily enjoy ad-free Netflix, YouTube and Hulu." Doesn't mean most do (and there are strong statistical reasons that indicate that others enjoy it more as well).
- achow 5y ago
  > Netflix has barely tapped its global potential (partially more and more users of countries come online world-wide).. The problem with this argument is it is not thought through. Expanding to newer markets is not about simply enabling credit card payment from those countries. The performance in India (not good) proved recently it is about localizing the content. Creating or buying new content for these new market costs money, and then managing those (staffing up local orgs, local production center, data center, etc.) also costs. Netflix is in content business, unlike software it is not about making copies and distributing world wide at zero cost.
  - KerryJones 5y ago
    achow@ not sure why you think it's not thought through? You're correct it is a content business, they just spent 17 billion on new content, far more than any other streaming provider (and have the subscribers to support it). Specifically in India, with Indian creators, and it worked. It's in their book "No Rules Rules".
    - GeneralMaximus 5y ago
      Netflix in India serves a niche audience. The Indian creators Netflix has brought on board so far mostly produce what's best described as prestige TV. While I've enjoyed some of these shows, they barely have a market outside of the major cities. Netflix in India is the best example of an American company attempting to grow in India and failing because they don't have any understanding of the culture. Google, Apple, and even IKEA have figured this out. I'm sure Netflix will, too. But it'll take them a bit of time.
  - cuteboy19 5y ago
    Markets in other countries ar also very quickly becoming saturated with local competition as well as Di$ney+ etc.
Espressosaurus 5y ago
The day netflix starts showing ads is the day I kill my subscription to them. And I've had that subscription since they were a DVD service.
- oblio 5y ago
  And Netflix will do the math and if losing you and people like you by selling ads makes them money they will politely show you the door.
  - lostdog 5y ago
    ...according to math invented by a manager with an interest in pretending that their case makes sense. Just jiggle the projection of how many people would cancel, and whalla!! You can justify anything.
ricktdotorg 5y ago
why do companies HAVE to get more subscribers? can't companies continue to exist on the number of subscribers that they have? can they not reduce costs -- while continuing to service that # of subscribers -- to generate better returns for their shareholders? would such actions cause shareholder/investor revolt? why? > the slow down of subscriber growth at Netflix is pretty clear and will require a response from the business how far does this go? when google or amazon or netflix or whomever has an active user account for almost all human beings on the planet, what then? why DOES a business need to respond when their subscriber growth has passed the nadir for given market(s) at given tiers when the ROI for that business at those tiers and market volume is ~20% per quarter? are those returns not enough? if the company (Netflix) could keep existing revenues at existing customer volumes while also reducing their infrastructure/delivery costs, would that not be enough?? would they NEED more customers? why?
- haneul 5y ago
  Their P/E demands it.
- achow 5y ago
  > how far does this go? when google or amazon or netflix or whomever has an active user account for almost all human beings on the planet, what then? If you are not constantly growing then you will not have everyone with you, this is because new people reach adulthood. You want them in your service while still retaining the older ones. In a steady state when all old population have your service and new ones are automatically adopting it, then you are a public utility (Ex. social security). And when you are a public utility or essential service then you don't have to market yourself, it becomes money printing business and it is dividend company and not a stock growth one.
- oblio 5y ago
  Aren't they a public company? If they don't keep growing their owners (shareholders) will be very upset and start firing people.
  - throwawayffffas 5y ago
jjulius 5y ago
>In credit to YouTube and Hulu, they give you the option to go ad free... Unless something has changed and I'm unaware, this is not entirely true for Hulu. I've been paying for that plan for years and they definitely still play ads for select shows. Edit: I think it has something to do with it being a network show that Hulu hosts the day after it airs on cable, or something, but they're definitely still there.
- 0des 5y ago
  That's the cheap plan I think. I've seen it many times.
  - tyingq 5y ago
    >Hulu (No Ads): For $12.99/month you can watch most of those same shows and movies without the ad breaks. There's that *most* word.
8n4vidtmkvmk 5y ago
why don't they just stop hiring and enjoy the free money? as long as people aren't unsubbing, they're fine, no? why do companies always have to grow, even to the detriment of the service they're trying to offer? everything becomes shit eventually and then opens the door for the next hot thing that hasn't yet been tainted
willcipriano 5y ago
Hulu isn't ad free, it's less ads if you pay.
- giobox 5y ago
  There is more than one tier of sub, but ad free does exist, and is explicitly called the "Hulu (No Ads)" plan. In the US its $12.99 right now, and has been around a while: https://help.hulu.com/s/article/hulu-no-ads#hulu https://help.hulu.com/s/article/hulu-no-ads#hulu They also have a $6.99 sub that does have ads, which may be what you are thinking is the only option? https://help.hulu.com/s/article/how-much-does-hulu-cost https://help.hulu.com/s/article/how-much-does-hulu-cost To my knowledge no one can watch Hulu with ads and no sub like YouTube - all plans have a subscription, you just pay more to remove the ads.
  - willcipriano 5y ago
    Check out this support page: https://help.hulu.com/s/article/ads-no-commercials https://help.hulu.com/s/article/ads-no-commercials > Due to streaming rights, there are a select number of shows from our streaming library that will play with a short ad break before and after each episode for Hulu (No Ads) subscribers > Shows and movies from HBO, SHOWTIME, Cinemax, and STARZ don’t have ad breaks, but there may be promotional content before certain videos.
    - giobox 5y ago
      If you actually read the support page you linked and understand what Hulu offers, its still an "ad free" Hulu service for 12.99. For almost all of the limited cases where ads do occur, its due to it being an optional external streaming service integration or "live" TV channel with their own app offering that Hulu are offering as an optional extra you can bundle in (for more $$). I can't criticise Hulu too hard for not controlling ads on live television or optional third party services you can integrate to their own app - these are almost all optional extra channels/streaming services and not part of Hulu's own shows or offering. Almost every single streaming show from Hulu themselves without exceptions is ad-free on the 12.99 plan, exactly as the plan name says. In addition to understanding the support page, I use the service and the no-ad plan almost every day in my own home, it's definitely a thing and works exactly as its name (no ads!) suggests. Its probably why it's called the "no ads" plan...
zimpenfish 5y ago
> In credit to YouTube and Hulu, they give you the option to go ad free Not entirely, though, for YouTube because paying doesn't remove the "And here's a word from our sponsor" segments that people are now using instead of ad breaks, right?
- sebzim4500 5y ago
  Yeah but that's what https://sponsor.ajay.app/ https://sponsor.ajay.app/ is for.
- deleted 5y ago
  [deleted]

by giobox 5y ago

KerryJones 5y ago

I did read the article thoroughly, and I think he hasn't seen the larger perspective. I'm an investor in Netflix, and have also dug deeply into many other in-depth analyses of them, and while he says its "long-term", that doesn't mean it is. Netflix has barely tapped its global potential (partially more and more users of countries come online world-wide), and many companies have experienced what they call "demand pulled forward", i.e. extra growth in pandemic that then falls as pandemic heads towards a close. This is short term, and he has assumed that the slow in growth is the "inevitable decline" of Netflix Subscriber growth. Also, to be clear, I think Stratechery is an incredible source and usually agree with him. I don't in this case. I wasn't trying to respond to his points more directly, I was taking on the perspective of what is good for the companies growth. Just because you "happily enjoy ad-free Netflix, YouTube and Hulu." Doesn't mean most do (and there are strong statistical reasons that indicate that others enjoy it more as well).

achow 5y ago
> Netflix has barely tapped its global potential (partially more and more users of countries come online world-wide).. The problem with this argument is it is not thought through. Expanding to newer markets is not about simply enabling credit card payment from those countries. The performance in India (not good) proved recently it is about localizing the content. Creating or buying new content for these new market costs money, and then managing those (staffing up local orgs, local production center, data center, etc.) also costs. Netflix is in content business, unlike software it is not about making copies and distributing world wide at zero cost.
- KerryJones 5y ago
  achow@ not sure why you think it's not thought through? You're correct it is a content business, they just spent 17 billion on new content, far more than any other streaming provider (and have the subscribers to support it). Specifically in India, with Indian creators, and it worked. It's in their book "No Rules Rules".
  - GeneralMaximus 5y ago
    Netflix in India serves a niche audience. The Indian creators Netflix has brought on board so far mostly produce what's best described as prestige TV. While I've enjoyed some of these shows, they barely have a market outside of the major cities. Netflix in India is the best example of an American company attempting to grow in India and failing because they don't have any understanding of the culture. Google, Apple, and even IKEA have figured this out. I'm sure Netflix will, too. But it'll take them a bit of time.
- cuteboy19 5y ago
  Markets in other countries ar also very quickly becoming saturated with local competition as well as Di$ney+ etc.

Espressosaurus 5y ago

The day netflix starts showing ads is the day I kill my subscription to them. And I've had that subscription since they were a DVD service.

oblio 5y ago
And Netflix will do the math and if losing you and people like you by selling ads makes them money they will politely show you the door.
- lostdog 5y ago
  ...according to math invented by a manager with an interest in pretending that their case makes sense. Just jiggle the projection of how many people would cancel, and whalla!! You can justify anything.

ricktdotorg 5y ago

why do companies HAVE to get more subscribers? can't companies continue to exist on the number of subscribers that they have? can they not reduce costs -- while continuing to service that # of subscribers -- to generate better returns for their shareholders? would such actions cause shareholder/investor revolt? why? > the slow down of subscriber growth at Netflix is pretty clear and will require a response from the business how far does this go? when google or amazon or netflix or whomever has an active user account for almost all human beings on the planet, what then? why DOES a business need to respond when their subscriber growth has passed the nadir for given market(s) at given tiers when the ROI for that business at those tiers and market volume is ~20% per quarter? are those returns not enough? if the company (Netflix) could keep existing revenues at existing customer volumes while also reducing their infrastructure/delivery costs, would that not be enough?? would they NEED more customers? why?

haneul 5y ago
Their P/E demands it.
achow 5y ago
> how far does this go? when google or amazon or netflix or whomever has an active user account for almost all human beings on the planet, what then? If you are not constantly growing then you will not have everyone with you, this is because new people reach adulthood. You want them in your service while still retaining the older ones. In a steady state when all old population have your service and new ones are automatically adopting it, then you are a public utility (Ex. social security). And when you are a public utility or essential service then you don't have to market yourself, it becomes money printing business and it is dividend company and not a stock growth one.
oblio 5y ago
Aren't they a public company? If they don't keep growing their owners (shareholders) will be very upset and start firing people.
- throwawayffffas 5y ago

jjulius 5y ago

>In credit to YouTube and Hulu, they give you the option to go ad free... Unless something has changed and I'm unaware, this is not entirely true for Hulu. I've been paying for that plan for years and they definitely still play ads for select shows. Edit: I think it has something to do with it being a network show that Hulu hosts the day after it airs on cable, or something, but they're definitely still there.

0des 5y ago
That's the cheap plan I think. I've seen it many times.
- tyingq 5y ago
  >Hulu (No Ads): For $12.99/month you can watch most of those same shows and movies without the ad breaks. There's that *most* word.

8n4vidtmkvmk 5y ago

why don't they just stop hiring and enjoy the free money? as long as people aren't unsubbing, they're fine, no? why do companies always have to grow, even to the detriment of the service they're trying to offer? everything becomes shit eventually and then opens the door for the next hot thing that hasn't yet been tainted

willcipriano 5y ago

Hulu isn't ad free, it's less ads if you pay.

giobox 5y ago
There is more than one tier of sub, but ad free does exist, and is explicitly called the "Hulu (No Ads)" plan. In the US its $12.99 right now, and has been around a while: https://help.hulu.com/s/article/hulu-no-ads#hulu https://help.hulu.com/s/article/hulu-no-ads#hulu They also have a $6.99 sub that does have ads, which may be what you are thinking is the only option? https://help.hulu.com/s/article/how-much-does-hulu-cost https://help.hulu.com/s/article/how-much-does-hulu-cost To my knowledge no one can watch Hulu with ads and no sub like YouTube - all plans have a subscription, you just pay more to remove the ads.
- willcipriano 5y ago
  Check out this support page: https://help.hulu.com/s/article/ads-no-commercials https://help.hulu.com/s/article/ads-no-commercials > Due to streaming rights, there are a select number of shows from our streaming library that will play with a short ad break before and after each episode for Hulu (No Ads) subscribers > Shows and movies from HBO, SHOWTIME, Cinemax, and STARZ don’t have ad breaks, but there may be promotional content before certain videos.
  - giobox 5y ago
    If you actually read the support page you linked and understand what Hulu offers, its still an "ad free" Hulu service for 12.99. For almost all of the limited cases where ads do occur, its due to it being an optional external streaming service integration or "live" TV channel with their own app offering that Hulu are offering as an optional extra you can bundle in (for more $$). I can't criticise Hulu too hard for not controlling ads on live television or optional third party services you can integrate to their own app - these are almost all optional extra channels/streaming services and not part of Hulu's own shows or offering. Almost every single streaming show from Hulu themselves without exceptions is ad-free on the 12.99 plan, exactly as the plan name says. In addition to understanding the support page, I use the service and the no-ad plan almost every day in my own home, it's definitely a thing and works exactly as its name (no ads!) suggests. Its probably why it's called the "no ads" plan...

zimpenfish 5y ago

> In credit to YouTube and Hulu, they give you the option to go ad free Not entirely, though, for YouTube because paying doesn't remove the "And here's a word from our sponsor" segments that people are now using instead of ad breaks, right?

sebzim4500 5y ago
Yeah but that's what https://sponsor.ajay.app/ https://sponsor.ajay.app/ is for.
deleted 5y ago
[deleted]