Netflix and Co.
Advertising on streaming services: Experts see potential
On more and more streaming services, customers have to be sprinkled with advertising if they opt for a cheaper subscription. photo
© Silas Stein/dpa
Netflix with commercial breaks? This is probably the case for customers – who have to pay less for their streaming subscription. According to experts, the new business model could be very profitable for providers.
Experts see great potential for advertising-financed offers from the major streaming services. At the world’s largest television trade fair Mipcom in Cannes, Maria Rua Aguete from the London market research company Omdia calculated that a total of around 190 billion dollars will be invested in online advertising this year. In 2027 it should be 362 billion dollars.
“With the prospects like this, it’s no surprise if all the major SVOD services, including Netflix, are also looking to capitalize on this growth.” SVOD stands for subscription video-on-demand, i.e. streaming services with a subscription contract.
The director of Omdia’s research department estimates that by 2027, almost 60 percent of global Netflix fans will be using the ad-supported version. That would account for 23 percent of US revenue. Globally it could then be 14 percent.
4.99 euros for a Netflix subscription with advertising
Netflix finalized its plans for a discounted basic subscription with advertising last week. The tariff will cost EUR 4.99 per month in Germany and will be available from November 3rd. At launch, spots will be 15 or 30 seconds long and run during or before the series and films. Customers have to let themselves be sprinkled with an average of four to five minutes of advertising per hour. Amazon had previously launched its advertising-financed free service Freevee.
What is just beginning in Germany has already been recorded in the USA: Paramount+ has ten minutes of advertising per hour with 26 spots. Peacock puts in five minutes and HBO Max puts in four minutes.
The offers of the video platforms are thus significantly cheaper for the public, at least as far as the subscription fees are concerned. As a rule, however, they have to provide something in return – with their own data.
The Mipcom trade fair shows what will soon be flickering across the screens in millions of living rooms. More than 10,000 managers from broadcasters, production companies, program distributors, Internet platforms and media groups have gathered on the Côte d’Azur to buy and sell new programs. The fair ends on Thursday.