Netflix with ads a new opportunity for retail

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By Power RetailPublished On: October 14, 20220 Comments

Streaming giant Netflix have formally confirmed their plans to release a cheaper, ad-supported subscription model for its service, with the cheaper per-month option to officially launch on November 3.

The pivot from Netflix to offering a cheaper per-month subscription option with advertisements built in as a component comes following a surprising decline in subscribers for the platform since a spike during the first year of the coronavirus pandemic in 2020, reportedly losing more than one million users in the first half of 2022.

At a monthly cost of $6.99, a full ten dollars less than the Standard subscription option for Australian Netflix subscribers, the platform suggests that users can expect to see up to four minutes of advertisements per hour of watching if subscribed to the cheaper, ad-supported subscription model.

Combining individual user engagement data in addition to tailoring based on location and age demographic, it is expected that advertisements will be personalised to each user as a means to maximise benefits for consumers and advertisers alike.

The opportunity provided by engagement with Netflix and advertising on its platform via the cheaper ad-supported subscription option could prove a unique and potentially significant revenue opportunity for retailers particularly, reaching Netflix subscribers who might otherwise not be engaged by more traditional broadcast and television advertisements.

According to data from streaming service aggregator JustWatch, Netflix continues to boast a considerable presence in the Australian market, reporting the platform as holding market share for streaming services locally as high as 28 percent in the second quarter of this year. Despite the size of its audience, whether or not retailers will be quick to jump on opportunities to advertise with the platform remains to be seen.

However, as the marketing landscape continues to see significant changes, and consumer behaviours seek to adapt to a challenging economy, any opportunities to reach new and engaged audiences will prove difficult to pass up.

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