With more and more content being launched through OTT platforms, they are no more mere side portals to watch movies and series when there is nothing worth it on television or in theatres. There is content specifically crafted for OTT platforms, sometimes even produced by the OTT platform itself. Netflix is one of the first platforms to have breakthroughs followed by several others. A pioneer of sorts.
Netflix has recently introduced a new lower-priced subscription tier along with their existing subscription plans. The catch in this plan is that there will now be advertisement interruptions while users watch their shows and movies. This plan was introduced after Netflix had built its binge-worth and ad-free community.
This new ad-supported algorithm of Netflix is surprising to users as just in 2020, Netflix had ruled out advertising on the platform. The changed business model, however, wasn’t accepted well by the viewers of Netflix making it suffer from its first subscriber loss for the first time in over a decade.
The Lower-Priced Subscription
The hybrid advertising-subscription tier is Netlfix’s way of adopting a new business model which aims to gather revenue through not just subscription fees, but also from additional advertising and promotional charges.
It’s essential to keep in mind that not all Netflix subscription tiers will include advertising. According to the present proposal, there will be a single, newly established, and less expensive subscription tier financed by advertising, with a price point aimed at the US market of $7-9 per month. This will be less expensive than the current least expensive package, which costs USD $9.99 per month. These prices will be adjusted to reflect the various currency markets that Netflix operates in as well as the going rates there.
Streaming and Advertising
Advertisements will be carried out for 4 minutes every hour of content. Netflix originals will be free from these advertisements for a limited period, but all the existing and new genres of shows and movies will have promotional sets in between.
Netflix also suggests pre-roll ads rather than in-between ads as the latter may disrupt the link the viewer has with the ongoing series or movie.
Future Experiments With OTT
Before Netflix, OTT platforms like Disney+, Discovery+, and Hulu have previously experimented with adopting this ad-supported business model. These platforms are a way to reach new audiences and maximize revenues.
Will OTT end up being the same as mainstream television?