As one of the largest streaming service in the world, Netflix has widespread presence in many countries, but it’s not always the case for some regions. In regions where the purchasing power is weak, having a paid-only platform may work against the company, which is why it has since introduced a cheaper, ad-supported tier. However, Netflix is reportedly going further than that, potentially introducing a free tier fully supported by ads.
Netflix For Free?
Per Bloomberg’s report, Netflix has “discussed” the potential for a free tier in some markets, primarily in Europe and Asia. The company previously trialed this plan in Kenya for a limited time, as it may end up tapping certain countries where free, ad-supported TV networks can gain more revenue than paid ones (think Germany and Japan). One thing is for sure, however: US is not getting this tier as the streaming service has already penetrated the market.
Another streaming service that relies on advertising for revenue is, technically, YouTube. While the Google-owned platform is seen as a video-sharing platform first rather than a full-fledge streaming service, the company has been slowly moving upmarket with various efforts to coax its userbase to pay for its YouTube Premium subscription. There’s is another crucial difference between the two: YouTube, as part of Google, gets to tap into a massive advertising platform, while Netflix largely lacks one (though Microsoft has helped it grow in exchange for tapping into the streaming service as its new advertising backyard).
While nothing is set in stone at this point, it wouldn’t be too far fetched to say this is where Netflix will go next. Given that the company has struggled to gain revenue for a while, which necessitated password-sharing crackdowns, the potential for ads to net big revenue gains would be something too big for it to ignore.
Pokdepinion: It’s ironic that streaming services used to be the escape from ad-ridden TV programming, but it’s coming back all over again.
