One of the characteristics of Netflix – and one of the elements that have made the VoD experience that big boom in general – is the fact that it has no advertising. Unlike traditional television, in which before and during the viewing of content you have to see ads, video on demand platforms have completely eliminated (in almost all cases) ads. The consumer pays a fee and thereby receives an ad-free viewing experience. This does not mean that video on demand platforms do not have agreements with brands and do not have a presence in the advertising market (the collaborations that establish their star series with different brands are marketing actions clear and efficient) and also that analysts are not counting the days in their calendars for the arrival of the announcements.A couple of months ago, in fact, experts were already pointing out that Netflix would have to open up to ads at some point if it wanted to remain sustainable. In fact, the statements of a senior Google board already indicated that Netflix was working in that line (their words pointed to the “recruiters” of the platform talking about a Netflix with advertising in the future) and also the forecasts of the analysts, who do not believe that Netflix can live in the long term without them.
Although a Netflix with advertising Romania Phone Number List would open a debate on whether or not its consumers are prepared to accept that format and to see it with good eyes, doing so could make the company one of the great competitors for the advertising market on the net.The money Netflix would makeIn fact, the analysts have already put amounts and have already done their accounts of the dairy. In a note to investors, an Instinet analyst pointed out that if Netflix launched ads, it would find itself in a more comfortable financial situation.It would not need to be launching debt “frequently” because that injection of advertising capital would allow it to cover what it now covers with debt. In the analysis, there is speculation with a format similar to Hulu, in which paying users remove the ads and others can access an ad-supported freemium version.The revenue data would be positive, or so the analysis believes.
Estimating that it will launch that version with announcements and only in one market (the US), the analysis firm believes that it could reach 1 billion dollars in revenue per year.”Building on what we believe to be conservative assumptions (launching an ad-supported service in the US in 2020, scaling up to a quarter of the step base by 2021), we see a potential revenue opportunity of over $ 1 billion. per year, “says the forecast, which would become, once expenses and taxes have been eliminated, into a net income of 700 million dollars.The revenue is far from what some other players are expected to make. Amazon, for example, is expected to hit $ 38 billion in annual ad revenue over the next five years , putting it in a strong position against the monopoly.
Twitter also makes more money per year than that figure. In its last fiscal year, it closed with $ 3 billion. Of course, these data are, yes, global and not only American as the analyst estimates that it would happen with the potential advertising of Netflix.Is it worth changing strategy? Should Netflix make the leap to ads? As they recall in Market Watch , following the estimates, Netflix has made the absence of advertising one of its great values and one of the elements that it uses on a recurring basis to position itself in front of consumers. But, as they point out from the analysis firm, advertising could become an opportunity “too difficult for Netflix to continue resisting.”