From Bloomberg:
Netflix has discussed creating free versions of its streaming service in some markets, namely in #Europe and #Asia, as the company looks for more ways to increase its audience, according to people familiar with its plans.
Netflix experimented with a free plan in Kenya, but discontinued it last year. Top executives at the company have discussed whether to create a free version of the service in far larger markets, especially those with popular free TV networks where it also sells ads. (Think #Germany or #Japan.)
But a free service would help the company reach more people who either can’t afford the service or don’t have a good way to pay for it. It would also address one of the biggest present challenges for the company: creating more advertising inventory.
When it comes to video #streaming, Netflix is the biggest player around (besides YouTube ). But when it comes to advertising, it’s still a minnow.
It would have been hard for Netflix to adopt the same strategy as The Walt Disney Company or Amazon. It had no experience selling ads, and its customers likely would have revolted. Netflix spent years pitching itself as #TV without ads. Most of Amazon ’s customers are paying for free shipping.
But advertising executives believe it is inevitable that Netflix will introduce ads to its most popular current tier in the future. (Don’t freak out, there are no current plans to do this.) When Netflix’s user growth slows — as most expect it will in the next 12 months — it will be even imperative to make more money from ads. And the only way to do that is with more scale.
In the near term, the company needs to find a quick path to create a lot more advertising inventory, which explains Netflix’s push into live events and #sports. Viewers of the WWE will see ads whether they pay for the ad-free version or not. The same goes for National Football League (NFL) fans on Christmas Day.
There are some who still think Netflix is only in the #advertising business because it needs to be — not because it wants to be. But the company says it sees advertising being a meaningful contribute to its business in the next couple of years, and is bringing more of the technology and sales in-house, a sign of its growing ambitions and investment. After years of giving customers an escape from advertisements, Netflix will be looking for more and more ways to show them to you.
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1moMany congratulations Fadi