Why Netflix Should Sell Ads (stratechery.com) 169
Ben Thompson, making a case for why Netflix should sell ads: Here Netflix's biggest advantage is the sheer size of its subscriber base: Netflix can, on an absolute basis, pay more than its streaming competitors for the content it wants, even as its per-subscriber cost basis is lower. This advantage is only accentuated the larger Netflix's subscriber base gets, and the more revenue it makes per subscriber; the user experience of getting to that unique content doesn't really matter. All of these factors make a compelling case for Netflix to start building an advertising business. First, an advertising-supported or subsidized tier would expand Netflix's subscriber base, which is not only good for the company's long-term growth prospects, but also competitive position when it comes to acquiring content. This also applies to the company's recent attempts to crack down on password sharing, and struggles in the developing world: an advertising-based tier is a much more accessible alternative.
Second, advertising would make it easier for Netflix to continue to raise prices: on one hand, it would provide an alternative for marginal customers who might otherwise churn, and on the other hand, it would create a new benefit for those willing to pay (i.e. no advertising for the highest tiers). Third, advertising is a natural fit for the jobs Netflix does. Sure, customers enjoy watching shows without ads -- and again, they can continue to pay for that -- but filler TV, which Netflix also specializes in, is just as easily filled with ads. Above all, though, is the fact that advertising is a great opportunity that aligns with Netflix's business: while the company once won with a differentiated user experience worth paying for, today Netflix demands scarce attention because of its investment in unique content. That attention can be sold, and should be, particularly as it increases Netflix's ability to invest in more unique content, and/or charge higher prices to its user base.
Second, advertising would make it easier for Netflix to continue to raise prices: on one hand, it would provide an alternative for marginal customers who might otherwise churn, and on the other hand, it would create a new benefit for those willing to pay (i.e. no advertising for the highest tiers). Third, advertising is a natural fit for the jobs Netflix does. Sure, customers enjoy watching shows without ads -- and again, they can continue to pay for that -- but filler TV, which Netflix also specializes in, is just as easily filled with ads. Above all, though, is the fact that advertising is a great opportunity that aligns with Netflix's business: while the company once won with a differentiated user experience worth paying for, today Netflix demands scarce attention because of its investment in unique content. That attention can be sold, and should be, particularly as it increases Netflix's ability to invest in more unique content, and/or charge higher prices to its user base.
Netflix should keep raising prices (Score:5, Funny)
Until it becomes feasible for competitors to move into the space and undercut them.
Why would I pay MORE (Score:5, Insightful)
Re: Why would I pay MORE (Score:2)
Mod parent up!
Re:Why would I pay MORE (Score:4)
That's literally what cable is.
Re: (Score:3)
It's not, you're repeating a garbage trope. The first cable networks were not ad free or marketed as such. They were literally the same over the air networks, ads included, provided on a wire. It wasn't until cable-only channels like HBO came out later that you had any ad-free content on cable, usually at a premium cost.
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Maybe it's different where you are, but around here you have to pay a subscription to get cable, and then more subscriptions for different channel packs, and then the channels in those packs have ads on them too.
Re:Netflix should keep raising prices (Score:5, Informative)
Yeah, if Netflix introduces ads, I will cancel faster than I can read the press release. I'm already on the fence about keeping my subscription but doing this would seal the deal for them.
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Re:Netflix should keep raising prices (Score:4, Insightful)
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Once upon a time, there was a choice (Score:5, Insightful)
You could go to a place called a video/dvd store and rent any movie they had, which came from all the studios. You did not need to go to a Disney store to rent a Disney movie etc.
And then we got the advanced technology of streaming. Now you have to choose which studios you wish to patronize. And not just movie by movie, but on a monthly basis. And they constantly update the movies depending on the political correctness of the times.
Progress.
And that is the threat to Netflix. Content they cannot get access to.
Re: Netflix should keep raising prices (Score:3)
Re: (Score:2)
They removed "Star Trek: Enterprise", and several months later they re-instated it. There's hope...
Re: Netflix should keep raising prices (Score:4, Insightful)
If Netflix acts like the other streaming services, they'll probably offer something like a $2 or $3 a month discount on their "ad supported" tier.
Of course, they'll end up raising their rates by $2 or $3 18 months later, so you'll end up eventually paying the same price anyway.
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I find the balance of "ads and promotional" in Netflix perfect. No ads and a single promotional on the front page. The fact that is "autoplay" is - for the moment - indifferent to me (it used to not be "autoplay"). ... I don't see them having any success entering _that_ market.
As for ad-supported material... there's already youtube, internet TV and radio stations, cable TV, car radio,
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Really, though, I like the idea of a service where I, the consumer, is the customer. I'm happy to pay for that, because ad-supported services still get revenue out of you, but the sneaky way. If Netflix starts depending on ad revenue they *will* get into the business of selling user data, in which case I will no longer be willing to pay a subscription fee and I will drop them.
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Whoever thought of it will probably get a huge stock bonus. And sell it off before NFLX tanks.
Back in the olden days of NTSC broadcasts, there were circuit schematics in the electronics rags that let you build auto-mute features for any TV. It'd catch the sneaky distorted audio (compression, etc) that makes ads seem louder than your TV show. The production trick became so common that you could filter out about 9 out of 10 ads without impacting your normal TV watching. Even with the sensitivity turns down yo
Re:Whoever thought this was a good idea (Score:4, Insightful)
Yeah, with all the announcements the more they tighten their grip, the more customers will slip through their fingers.
They're already discovering that a large percentage of the 'account sharing' is people in their mid-40s with adult kids, exes, step-families, and similar. Tighten it up and kids will be cut out, they will turn to piracy and the parents will stop the account. Same with others who share the account, it won't result in multiple purchases, but instead in cancellations since neither person will watch it enough to justify the cost.
Lacking ads was a big reason the platform has remained viable. Cable got away with it because there was no competition, every company had a regional monopoly. Put ads back in the online streaming and combine it with the other factors, like the dwindling availability of shows as everyone turned to their own platforms, and the leaking of their private label shows to pirate platforms, and together there's little incentive to keep paying.
They seem to have forgotten how they became popular.
A big reason their streaming platform became successful was that it was easier and safer than piracy. The online streaming would monitor pirate sites to see what was becoming popular, so they could license it for the platform next.
This isn't Netflix sweeting the platform to entice new customers, this is Netflix souring the platform and hoping people don't flee. Piracy sites have become extremely sweet again relative to the long list of platforms out there. Netflix execs (and other platforms, too) are likely to learn some hard lessons in the near future.
Re: Whoever thought this was a good idea (Score:2)
They wont be, because no meaningful amount of people will cancel their subscription over ads. People pay $250 monthly for cable that is infested with ads. Hulu paid tier has ads, as do the paid tiers of paramount plus.
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There is plenty of content that is under-represented on Netflix. And which is relatively ad-free (like HGTV for beautiful houses and gardens, some wonderful food channels, some nature TV channels). One could spend hours upon hours a day on these kinds of cable TV channels with few ads - unfortunately access to them is limited to cable TV higher price tiers. As a side note, I spend hours a month so I have no idea about the rate of "re-runs".
I'd say this is the reason Cable TV still has a market.
Or alternatively.. (Score:5, Insightful)
They can not sell the soul to the devil and keep their programming clean.
Piracy (Score:5, Insightful)
The main reason piracy became so popular was because it was more consumer friendly, not because it was free. Piracy still had problems you had to deal with, but those problems were less than the problems of a paid-for cable subscription service, such geo delays and loads of commercials.
Are MBAs simply incapable of learning or something?
Re: (Score:3, Interesting)
Everyone acts like the humanities are the only part of universities that have echo chambers.
MBA's are two trick ponies, it's always either cut labor costs by laying people off or increase revenue by selling user data and or ads.
Much like crypto developers there is so much good brainpower working on just abject garbage.
Re: Piracy (Score:2)
MBA? Brain power?!
You're watching the wrong movie.
Re: MBA Brain Power (Score:2)
This was recognized long ago:
https://www.youtube.com/watch?... [youtube.com]
Re:Piracy (Score:5, Insightful)
Are MBAs simply incapable of learning or something?
No, they are just greedy.
No amount of money is ever enough. If you make 2 Billion, it should be 4 billion. If you make 4 Billion it should be 8 Billion. This quarter must be significantly higher than the previous quarter, and the next quarter must be even higher. There must be infinite increase in revenue.
There's nothing wrong with making money. Making money is absolutely necessary -- if you don't make money you go out of business. But the concept of keeping things reasonable has been completely lost.
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There must be infinite increase in revenue.
At the current rate of inflation - there better be, or you're going to go out of business...
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Re:Piracy (Score:4, Insightful)
Being free was a pretty big reason though.
Re:Piracy (Score:4, Informative)
I wrote a little user script that ads links to rarbg.to and the Pirate Bay to a TV calendar site (https://www.pogdesign.co.uk/cat/). A few clicks and I have any show I want. The UX is excellent, and I would happily pay for it.
Netflix was originally supposed to be like that. These days... None of them will ever compete with piracy. I only pay to support stuff I like, but even it's usually easier to just pirate a copy than to stream or rip the disc. I have brand new CDs and DVDs that have never been played in boxes.
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Ripping DVDs is a pain, though
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I tried to rip a DVD with support for multiple languages and with many episodes... Seems that there's a limit of "99 files" - which is fine for a single movie with four-five languages, but not fine for 12 episodes with 15 languages each.
Wtf? (Score:5, Interesting)
One of the reasons I pay for a streaming-service is that I absolutely abhor ads.
History tells us that once ads are introduces into an "eco-system" it doesn't take particularly long before they are fucking everywhere, regardless of tiering, and as time passes they get more and more intrusive while disrupting the viewing experience.
Fuck that.
Re:Wtf? (Score:5, Interesting)
Exactly this. I watch MAYBE 2 hours of TV a month. I'm only paying for Netflix so my kids can watch cartoons. The second they start coming to me asking for the latest toy or game or whatever ad they saw, is the second I cut Netflix off. They're already marginally not worth the money, to me (I'd prefer my kids be out in the neighborhood running amok anyway) so it won't take much to push me out. I don't have a gauge of how many people there are like me, but I have to assume that introducing ads would probably be the last straw for a lot of people.
Re: Wtf? (Score:3)
I don't have a gauge of how many people there are like me
*raises hand*
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I watch more TV then you do, but zero ads. I can't stand them anymore. I only watch the BBC live (no ads), everything else is streaming and and free. If it has ads, I'm not watching it.
Re:Wtf? (Score:5, Interesting)
Agreed. My 6 year old has gone her entire life without seeing ads on TV or on the web. When she sees them she gets confused and sometimes upset - which is exactly how she should feel.
If Netflix goes down that road what it will end up doing is encouraging everyone to start pirating their content.
Re:Wtf? (Score:5, Informative)
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Please mod parent +5 million informative, please.
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"This show is "too political", that one is "not family friendly", there's one that "shows our industry in an unfavourable light"
Not to mention the "you get $1 million for showing the first ad in a previously free from ads programme, but only $10,000 for the second ad". The value of a programme that didn't had ads freefalls in the eyes (and pockets) of ad-selling companies.
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Fuck that.
Abso-fucking-lutely yes! I'd mod you up if I had points
A good way to loose customers. (Score:5, Informative)
One of the main draws of my Netflix subscription is the lack of commercials. If they start airing commercials during shows on Netflix it won't be worth my $15 a month anymore.
I've been a Netflix customer since they first started streaming, when they were the only game in town. The streaming library 12 years ago included many thousands of both classic and modern movies, in addition to the shows from just about every network. The balkanization of streaming services has lowered the value of Netflix, while their subscription fees keep going up.
I'm already getting significantly less for my money than I did when I first started using the service.
I can easily watch any of their shows for free, without them blocking some content because I'm using a vpn, and without commercials, but that's still slightly less convenient.
Re:A good way to loose customers. (Score:5, Informative)
If Netflix tries shoving ads down my throat, I'll drop them like a hot rock.
Already thinking about it.
Not sure about that (Score:2)
"pay more than its streaming competitors for the content it wants, even as its per-subscriber cost basis is lower. "
People share Netflix accounts with family and friends and their dogs, but nobody will share their Prime account or those people will order champagne and caviar on your dime.
Re: Not sure about that (Score:2)
nobody will share their Prime account
No reason to. Every move on Prime is either a B-tier with regional language doubling, or not included in the subscription and costs extra.
The two that aren't I already watched. Twice.
Businessman strategizes to raise profits. (Score:2)
Details at 10.
Seriously, I pay to not watch ads. Fuck off with that shit.
HBO does not have ad's and content may tone down (Score:2)
HBO does not have ad's and content may tone down just to make it an good fit for some ad's
Fuck you. (Score:5, Insightful)
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^ This
Re: Fuck you. (Score:2, Insightful)
This ^. With Scotchbrite.
Re (Score:2, Insightful)
Better not to (Score:2)
People don't like seeing ads. Pushing regular tiers upwards in price to make room for a bottom tier that would see ads seems like it's making their service worse. Would be best to avoid it.
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Right. There is not any part of this scheme that is good for subscribers, or Netflix. Is this guy being paid by some business to try to convince Netflix to destroy itself? Or maybe he is trying to create market pressure on NFLX stock.
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He's a follower of the "if your business isn't growing it's dead" line, originated (I believe) by stock speculators who won't buy companies that are merely stable.
buh bye (Score:3)
The moment that Netflix starts selling/showing ads is the day I cancel without even saying buh bye.
The whole point of Netflix was to not be the same as TV, making it more like TV makes it suck in the same way that TV sucks already.
Hulu is available if you want to pay for service *and* have ads. Enjoy all the ads you want on Hulu but keep your fucking ads off of Netflix.
Literally everything in the summary is backwards. (Score:4, Insightful)
The user experience doesn't matter? Matters enough that the last couple format changes for the worse were almost enough to cause me to cancel the service.
Who is this assclown and what ad agency hired him to write this pack of bullshit to get the marketing teams salivating? It's all garbage from the end-user perspective. But I suppose that's where most companies end up. Get big enough and the people you sell to cease to be customers and start to be viewed as ever-present slaves.
Buh bye Netflix. You used to be good, then you got worse, now we're preparing to watch you triple down on that.
Please do (Score:3)
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User Experience (Score:2)
There's times when it's a better idea to give consumers fewer choices.
Create an ad-subsidized version of Netflix and you are going to get a chunk of new users (and a bunch of existing users switch over).
And most of these people are going to be making the very common mistake of undervaluing their own time, thinking "I'll save $X every month just by watching a few ads!".
The problem is that a Netflix with ads sucks quite a bit more than a Netflix without ads. And so for a lot of these users the response won't
netflix is way better than hulu (Score:2)
The ad selling also changes the company's culture. Netflix currently produces and sells a diverse suite of video streaming content. Facebook's core business is to harvest user data and sell ads (their social networking site is simply a honeypot for the moneymaking activities). The motivations are different. The result
CEO doesn't believe it (Score:5, Informative)
Despite what this MBA goober thinks a billion dollar company should do Reed Hastings has come out against it several times:
In Netflix’s view, remaining ad-free is a selling point, and wresting marketshare from Facebook, Google and Amazon wouldn’t be a picnic and, Hastings said, would also require Netflix to become a collector of large amounts of user data.
“We think with our model that we’ll actually get to a larger revenue, larger profits [and] larger market cap because we don’t have exposure to something we’re strategically disadvantaged at, which is online advertising against those Big Three,” Hastings said.
To “keep up with those giants,” he said, Netflix would have to spend heavily on implementing an infrastructure to support targeted advertising and engage in large-scale tracking.
Netflix doesn’t collect personal user info other than viewership-related data – such as search history, ratings and when someone is watching – which Netflix uses to train its personalization and content recommendation algorithm.
“We’ve got a much simpler business model,” Hastings said. “We’re not tied up with all that controversy around advertising.
And he makes a good point, Netflix's infrastructure is likely far simpler since they just serve up video and nothing else really. I think the time for this would have been a decade ago, what they really need is better producers because their movie division puts out some real... not crap persay but just sheet mediocrity.
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I'd love it if you gave a link to that quote. (I'm not pro-advertising, but I am pro-citation.)
Re:CEO doesn't believe it (Score:5, Informative)
Reed Hastings Explains Why Netflix Won’t Ever Sell Ads [adexchanger.com]
Heres a couple others where he says essentially the same thing, seems he gets asked this a lot.
Netflix CEO says the streaming service's decision to be ad-free isn't 'a philosophical thing' — it's simply 'the best capitalism' [businessinsider.com]
Netflix CEO Reiterates Zero Interest in Advertising Business: ‘There’s Not Easy Money There’ [variety.com]
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"not crap persay"
It's " per s " (or "per se" as slashdot won't accept the long e") - the Latin for "essentially", "by itself".
I Don't Subscribe Consistently Already, Not Alone (Score:2)
I subscribe for a couple months, watch the very very little that might have arrived since the last time I subscribed, forget to unsubscribe the following month, and then unsubscribe. Then I don't subscribe for seven or eight months and repeat. Now if you put advertisements on a platform I pay to watch, I'll pay someone else. And that is the same for all the streaming services. I paid Apple to watch Ted Lasso and then also watched the Issac Asimov Foundation series which sucked mostly. So I won't go back the
Only if (Score:2)
Bah, humbug ... (Score:2)
Second, advertising would make it easier for Netflix to continue to raise prices: on one hand, it would provide an alternative for marginal customers who might otherwise churn, and on the other hand, it would create a new benefit for those willing to pay (i.e. no advertising for the highest tiers). Third, advertising is a natural fit for the jobs Netflix does. Sure, customers enjoy watching shows without ads -- and again, they can continue to pay for that -- but filler TV, which Netflix also specializes in, is just as easily filled with ads.
I'm not paying through the nose for a 'premium' subscription just to be inundated by damned advertising even though I'm supposedly paying not to see any and I could not possibly give fewer shits about how 'innovative' this 'business model' is. I'm already paying 17.99€ for a premium YouTube subscription, they are now talking about making me pay $3 extra for every family member that also watches even though I can supposedly watch on 4 screens simultaneously according to the terms they sent me when I sig
This kind of argument ignores some pitfalls (Score:4, Insightful)
Adding advertising into content that was created without it in mind fundamentally changes the experience for all tiers of viewers, for the worse.
First, advertising tiers end up with ads shoehorned into content that wasn't created with ad-breaks in mind. You can see this first hand already on the Roku channel and other services that have gone a similar route. It's been an issue since the put movies on TV. Now imagine all those awkward ad breaks in the middle of bingable series.
Second, this effect will inevitably put pressure on content creators to tailor new content to fit into the format, reducing creative options and diminishing overall quality of original series.
Third, integrating advertising into thousands and thousands of hours of content, regardless of its source, is not free - Netflix would have to either pay for a huge amount of labor hours custom time-marking shows for ad-breaks, or rely on algorithms that have proven pretty terrible at predicting where a break makes sense without ruining the watcher's experience. That's not to mention the additional advertising and sales staff they'd have to hire. These extra expenses would eat into the additional income from advertising - possibly enough to make raising rates on paid tiers even more attractive.
In the end, it looks like a net-negative for paid subscribers, meaning they will be one step closer to cancelling their paid subscription. Viewers like me, who only watch a handful of Netflix exclusives (like the mentioned Stranger Things) will start doing what we do with Apple TV and Paramount+ right now - wait for a handful of shows we want to watch to become available, subscribe for two months, binge them all, cancel subscription, and repeat. Then it looks like a net-loss for Netflix.
As more and more services integrate cheaper or free advertising tiers, Netflix (like HBO) will only look better and better to people who are happy to pay a certain amount for good content without commercials, but not an unlimited amount.
Does he want to kill Netflix? (Score:3)
Many will argue that advertisements have saved some of these mediums, I will argue that advertisements have accelerated their loss in popularity.
Lease edge server space instead (Score:3)
No ads (Score:2)
he also said... (Score:2)
...that "Cable tv is socialism that works".
https://stratechery.com/2015/o... [stratechery.com]
Later in that same article, he spends a fair amount of energy justifying advertising.
Yeah, I have to question the motives here, even though he stridently asserts that (https://stratechery.com/about/) "...I do not tolerate accusations of speaking or writing at the behest of any company (this is the primary reason I â" very rarely â" block people on Twitter)...."
"Netflix can, on an absolute basis, pay more" (Score:2)
Has it managed to turn a profit, then? Or is this just "Netflix can, on an absolute basis, borrow even more cash to burn by alienating its subscribers"?
... just like Cable TV (Score:2)
When Cable TV was new, the promise was "no advertisements". They they added advertisements.
Then streaming video (Netflix, Youtube) came on the scene and announced "no advertisements". Youtube, at least, has already dropped that. Looks like Netflix is paying for feelers in that direction too.
I wonder what will replace streaming video...
Seriously I pay for Netflix top package and watch (Score:2)
Then goodbye Netflix (Score:2)
Just a trace of a shadow (Score:2)
of an ad on netflix and im out. i get it so's i don't have to watch endless ads.
Let Netflix fix the rural ripoff (Score:3)
Urban TV customers get advertising-sponsored content from the major networks, while rural customers have to pay a cable company to get the same content. An ad-supported Netflix tier could provide the same content to rural viewers who stream.
I tried to stream the Oscars this year by signing up for a trial of abc.com . I was supposed to be able to get network content during this trial, but the Oscars were not included. I had to pirate it like everybody else. Why was ABC so uninterested in supporting its own advertiser base here?
What a fucking moron (Score:2)
Essentially: one of the main reason to use ads is because people don't like them and will pay to not have them? Are all advertising cock jockeys this dense? Gobbling that advertising dingus must be scrambling their brains. Sloppily fellating advertisers is not going to get you friends like you think it will, becky.
Fuck, I am glad I have an adblocker. Fuck all those advertisers. Totally irredeemable.
Do you?? (Score:3)
Do you want to increase pirating? Because this is how you increase pirating...
Yes! (Score:2)
Cable TV didn't have ads at the beginning (Score:2)
Netflix can simply raise their rates. If customers decide the rate is worth it, they will stay.
Hmm, you raise an interesting point. If I may... (Score:2)
Re: (Score:2)
Re: Hmm, you raise an interesting point. If I may. (Score:2)
First ad I see on Netflix ends my subscription (Score:2)
They barely have my subscription as it is. The only thing keeping me from spending the effort to cancel is it's not worth my time yet. If I see an ad, that changes.
How about no? (Score:2)
I'm paying for it, thus there should be no ads.
I'd rather they raise the price than put in ads. Even if you're on an ad-free tier, Netflix originals will now have awkward breaks where ads would be inserted on the cheaper tiers.
Screw that. Either make it FREE with ads, or PAID with no ads. There should be nothing in between and it's downright annoying that there is on other services.
Should Apple have ad subsidized iPhones? (Score:2)
Why the world should punch Ben Thompson (Score:2)
Obviously being a shill making comments such as " the user experience of getting to that unique content doesn't really matter" in regards to Netflix selling ads, Ben Thompson openly asks the internet to punch him in the bawls. One can only assume that Ben is some form of "investor" who is willing to sacrifice long term growth, customer satisfaction and user retention for short term churn on the stock, Ben is a true piece of sh*t and should be ashamed.
It is far to easy for customers to move to a different s
Or... (Score:2)
Or, why don't we have one fucking thing in this world that isn't fucking covered in ads!
No Adds For Me, Thank You... (Score:2)
What Netflix should do if they want to increase revenue with ads is to offer a lower tier, say $4 to $6 a month, with ads. Keep those of us already paying the higher price as customers, with maybe a few who don't mind adds dropping down to that tier. Otherwise, I suspect they will lose a lot more customers than just me, possibly decreasing their overall revenue.
Just my thoughts though, I'm not a marketer looking to justify my job.
Torrenting and kodi.tv FTW! (Score:3)
Netflix already has enough targeted marketing... (Score:2)
...from the insidious autoplay system (which, thankfully, can be disabled), to the "suggestions" of dozens of other things you should binge watch so that all your free time is spent on the platform. They don't need explicit advertising when their users already tolerate those demons.
Alternate title (Score:2)
"I'm paid based on article clicks, so here's the dumbest clickbait I could come up with. Please click!"
hell no (Score:3)
Is the article based on MBA coursework? (Score:2)
This reads like an MBA student assignment. How a business can make more money (temporarily at least) if they do certain (obvious) things to exploit human resources (waste customer time with ads).
Auto play is already too annoying... (Score:2)
ads would simply cause me to dump my subscription.
Want more subscribers? Don't annoy them. Provide compelling content. Stop killing good original programming like Cowboy Bebop (it was just getting good), and keep making good original programming like Altered Carbon and Black Mirror. Bring back more fun non-US kids programming like Sarah & Duck and Kipper.
Remove annoying app features like auto-play. Let users perma-reject content (I never want to see Friends in the lists of shows... I'm never going
Re: (Score:3)
Netflix still does DVD by mail. People in rural areas often don't have the bandwidth to download a lot of movies. So, Netflix is like a content delivery system for Plex, streaming right to your door complements of the post office.