Netflix is finally giving in and saying it will offer ad-supported plans

By Matt Collins Article may include affiliate links

Netflix has long been averse to running advertising during its content — but that will be changing over the next few years.

The streaming company, which announced a subscriber loss for the first time in years in April 2022, says that it has started to develop an option for subscribers to pay a lower price in exchange for watching limited advertising.

The idea isn’t new, of course — competing streamers Paramount+, HBO Max, Peacock, Hulu and others all offer lower-priced plans that come with what’s often billed as “limited” commercial interruptions.

Disney+ also announced plans for a similar offering later this year in March 2022.

Netflix did not release pricing or a specific launch date, only to say it could be in the next year or two.

Other streamers typically offer about a $5 price cut to customers in exchange for watching ads, which are typically non-skippable and can play before, during or after content.

Netflix did note that it does not plan to target advertising based on consumer demographics and the treasure trove of viewer data it has, which has been touted as one of the advantages for companies to advertise on streaming services (it wasn’t immediately clear if that would also exclude advertisers to only buy ads during specific shows, which has long been a way for companies to target linear TV campaigns to get in from of more of the viewers they think their products or services might appeal more to).

The ad market for streaming advertising is still growing and evolving, with much of it limited to large, national brands that have big ad budgets to spend. Some streamers are filling ad breaks with promos for other shows it offers or ones available from corporate cousins due to a still relatively low pool of advertisers who have signed on.

Eliminating the ability to target users specifically could make buying ads on Netflix a tougher sell, with the company arguing that the streaming ad market is becoming large enough that it can deliver results for advertisers without having to rely on targeting.

“We can stay out of that, and really be focused on our members, creating that great experience,” it noted.

The mention of “great experience” is a bit interesting, especially considering the plans to not target ads.

While many find targeting to be a bit too personal, customers could also become frustrated be forced to watch irrelevant ads (right now, it’s not uncommon for streamers to play the same ad multiple times during the same program or series), which arguably erodes the “experience.”