Netflix could introduce ads later this year

Netflix could introduce ads later this year
Watching Netflix. Credit: Unsplash

Netflix is speeding up its plans to introduce advertising on its platform, the New York Times has reported.

Previously, the company opposed advertising on its streaming options, but its recent loss of revenue has pushed it to change its strategy.

Netflix boss Reed Hastings confirmed that his team was working on sponsored advertising. It is rumoured to launch in 2023 or 2024, possibly even sooner, with a launch to coincide with a push against users sharing accounts.

Streaming habits

Although the pandemic appears to be slowing down, it has entrenched streaming habits and many opt for the ease of watching streaming platforms. However, there are generational divides, with Generation Z – those born between the end of the 1990s and 2010 – being more likely to ditch streaming services for social media platforms such as Instagram or Tik Tok.

In addition, consumers get frustrated if their streaming service loses content and they have to pay for multiple services. Cost is a key factor, especially for Generation Z and Millennials, according to an article from the consultancy Deloitte.

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It costs money to acquire new subscribers so losing them quickly can dampen the ability of providers to get back acquisition costs. Yet it appears that people who leave streaming services may return.

To keep subscribers, streaming services are exploring flexible pricing options as ad-supported tiers could keep subscribers conscious of cost.

Netflix isn't the only streaming platform set to launch an ad-sponsored option. Disney announced in March that it planned to offer a similar subscription service later this year on Disney+.


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