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MEDIA BUYING

Advertising on Netflix would be a boon to marketers and media buyers

By our News Team | 2022

Netflix has never accepted paid advertising, but may follow video-streaming competitors in doing so as subscriber numbers drop.

When the going gets tough for video entertainment-streaming platforms like Netflix, the response seems to be to seek paid advertising in an effort to attract more subscribers via lower-cost packages.

Netflix, which has always resisted the lure of paid advertising within its content, announced recently that it will likely be introducing advertising on the platform within a few years. 

The strategy seems to be to offer lower-cost options to subscribers, which would then be subsidised by the ad revenue. In going this route, Netflix would by following similar video-entertainment platforms around the world – among them Disney and Home Box Office (better known as HBO). 

In mid-April, Netflix announced that it had lost subscribers for the first time in more than a decade. In the North American market alone, its subscriber number are down by 600 000 in the last financial quarter.

Media Buying

Photo by August de Richelieu from Pexels

“Those who have followed Netflix know that I have been against the complexity of advertising and a big fan of the simplicity of subscription,” co-CEO Reed Hastings said. 

Give advertising-tolerant consumers a choice

“But as much as I am a fan of that, I am a bigger fan of consumer choice, and allowing consumers who would like to have a lower price and are advertising-tolerant to get what they want makes a lot of sense.”

The advertising industry seems to have reacted positively to the news. In Australia, the Sydney Morning Herald reports that media buyers expect Netflix to become a significant force in the local advertising market if it adopts cheaper, ad-supported subscriptions.

“[Advertisers] are falling over themselves about Netflix,” Joe Frazer, Managing Partner at media agency Half Dome, told the newspaper, adding that advertisers would likely flock to the platform due to its large audience base and its strong reputation among consumers.

“Video-based advertising is just the biggest growth area at the moment, based on audiences shifting their consumption of content from linear to [broadcast video on demand] and streaming platforms,” he said.

Meanwhile, business magazine Forbes reports that, with an ad-supported tier, Netflix will potentially open its content to more users of different economic backgrounds who couldn’t afford Netflix previously. 

“This becomes even more important outside of wealthy countries like the US, as today’s streaming marketplace looks vastly different from five years ago,” Forbes said.

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    Dr Kin Kariisa

    Group CEO - Next Media

    Dr. Kin Kariisa is an extraordinary force at the helm of Next Media Services, a conglomerate encompassing NBS TV, Nile Post, Sanyuka TV, Next Radio, Salam TV, Next Communication, Next Productions, and an array of other influential enterprises. His dynamic role as Chief Executive Officer exemplifies his unwavering commitment to shaping media, business, and community landscapes.
    With an esteemed academic journey, Dr. Kariisa’s accolades include an Honorary PhD in exemplary community service from the United Graduate College inTexas, an MBA from United States International University in Nairobi, Kenya, a Master’s degree in Computer Engineering from Huazong University in China, and a Bachelor’s degree in Statistics from Makerere University.
    Dr. Kariisa pursued PhD research in Computer Security and Identity Management at Security of Systems Group, Radboud University in Nijmegen, Netherlands. As a dynamic educator, he has shared his expertise as a lecturer of e-Government and Information Security at both Makerere University and Radboud University.

    Dr Kin did his PhD research in Computer Security and Identity Management at Security of Systems Group, Radbond University in Nigmegen, Netherlands. He previously served as a lecturer of e-Government and Information Security at Makerere University in Kampala, Uganda and Radbond University in Netherlands.

    Dr Kin did his postgraduate courses in Strategic Business Management, Strategic Leadership Communication and Strategies for Leading Successful Change Initiatives at Harvard University, Boston USA.

    • Other current and previous roles played by Dr Kin Kariisa:
    • Lecturer of e-Government and Information Security to graduate students at Makerere University, Kampala and Radbond University in the Netherlands
    • Director of Eco Bank Uganda Limited, one of the largest banks in Africa
    • Chairman of the National Association of Broadcasters, an umbrella industry association for all Television, Radio and online broadcasters in Uganda.
    • Chairman of Board of Directors of Nile Hotel International, that owns the leading hotel in Uganda, Kampala Serena Hotel.
    • Chairman of Board of Directors of Soliton Telmec Uganda, the leading telecom company in Optic fibre business managing over 80% of optic fibre in Uganda.