Netflix’s stock plummeted last spring. The reason: The streaming service from the USA is struggling, the increasing competition from Disney +, Amazon Prime and others is affecting Netflix. In the past quarter, the number of paying customers fell again. Most recently, around 220 million people worldwide had a Netflix subscription.
Now the US company is announcing a new course to start the turnaround and win new subscribers again. From the beginning of November, a new subscription with advertising will be introduced in initially twelve countries. This is then significantly cheaper than before. In Germany, the advertising subscription will start on November 3rd, it will be available for just under five euros a month, Netflix announced on Thursday. The basic subscription is currently available for eight euros, the standard subscription from twelve euros, the price was increased at the beginning of 2022.
In the future, the new subscription will show an average of 4 to 5 minutes of advertising per hour, and a limited number of films and series will not be available for licensing reasons. The demand from advertising customers is high, so individual spots can be placed, tailored to the content, depending on whether it is about a romantic comedy or an action film. There will be no political advertising or advertising for cigarettes or weapons. The individual commercials should be between 15 and 30 seconds long and run before and during the series and films.
The new subscription is more expensive in the USA than in Germany
Netflix is thus also penetrating the business of private broadcasters. In Germany, the RTL Group and Pro Sieben Sat 1 finance their linear television programs with advertising. Recently, it was feared that, given the war in Ukraine, the energy crisis and poor economic prospects, advertising spending would tend to fall. Now there is also new competition from Netflix.
However, Netflix is also reacting to the growing number of competitors on the German streaming market – while at the same time consumers are declining in their spending mood. Amazon, for example, has launched the Freevee service, which is financed by advertising. Films and series are also shown there with commercial breaks. After the USA and Great Britain, Germany is the third country in which Amazon has placed the offer. Additional advertising can also be seen with the Sky or Dazn paid offers before the programs or sports broadcasts.
In addition to Germany, Netflix is now introducing the new offer in Australia, Brazil, Canada, France, Italy, Japan, Korea, Mexico, Spain, the United Kingdom and the United States. Other countries are to follow. The prices are different everywhere and sometimes higher than in Germany. In the US, for example, the advertising subscription is offered for seven dollars. So far, it was considered a great advantage of streaming services that customers could watch series and films without commercial breaks. Netflix announced that they now want to create “tailor-made offers” for everyone. Netflix films and series in better picture quality, on several devices at the same time and with download options, so that films and series can also be watched offline, will only be possible with the expensive subscriptions in the future.