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Right, but neither of these functions explains the circularity: if Netflix loses money on every paying subscriber versus the "ad watching sucker" demographic, w
by woodruffw 3y ago
Right, but neither of these functions explains the circularity: if Netflix loses money on every paying subscriber versus the "ad watching sucker" demographic, why spend billions of dollars a year[1] advertising your paid plans?
(Maybe I'm being too literal here -- it'd be fair to argue that Netflix mostly just advertises their shows, not the plans themselves directly.)
[1]: https://www.statista.com/statistics/688525/netflix-ad-expense/ https://www.statista.com/statistics/688525/netflix-ad-expens...
- martinflack 3y agoSome advertising of the ad-free paid plans is good because it takes the segment of customers who will not tolerate ads and gives them an option, rather than lose them.
- belltaco 3y agoWhere do they say they lose money on ad free paying subs? Maybe they make less profit than on free ad users.
- woodruffw 3y agoSorry, bad phrasing -- they don't lose money in an absolute sense, but make less on full-paying users than ad-watching ones.
- bobthepanda 3y agomedia is always about network effects. you want to talk to your friends about big shows. that only works if they watch the big shows, ad-free or not.